Editor’s Note: This story originally appeared on SmartAsset.com.
Are you retired but want to go back to work? Unless you’ve developed hobbies or have important interests outside of your career, retirement can be a lonely place.
Suddenly a lot of your social contacts are gone. Mental and intellectual pursuits might be lacking. The routines of your life have been turned upside down. Maybe retirement doesn’t seem like what you expected. Or maybe a little extra cash would help.
Before you return to the workforce, you should think about what type of job you want and the effect of working after you start receiving Social Security.
If you return to the workforce after you retire, you won’t be alone. Some 9 million, or nearly 19% of Americans aged 65 and over, work part-time or full-time, according to a recent analysis by the Pew Research Center.
Why return to work after retirement?
The current generation that is retiring is the baby boom generation, individuals born between 1946 and 1964. Over 10,000 per day retire, and that leaves a hole in the workforce. The coronavirus pandemic is also contributing to the loss of people in the workforce.
In the United States, companies, from small businesses to very large conglomerates, are hiring or trying to do so. There are a lot of retirees who want to go back to work. Some just want a part-time job. Others want a booster career.
In other words, there are a number of reasons to consider working in retirement.
The Employee Benefit Research Institute (EBRI) surveyed a group of people and found that it wasn’t all about the money, although 84% of those surveyed wanted to return to work for the extra money and 64% for fund essential expenses. Baby boomers could often count on a company’s pension plan, which was often a defined benefit plan, as well as their social security. But, things change over time, and inflation is eroding our purchasing power.
Defined benefit dollars don’t buy as much now as baby boomers thought, and the average monthly Social Security benefit is only around $ 1,500, although the cost of living adjustment in 2022 is expected to be 5.9%. The survey showed that about 21% of people wanted to return to work to delay claiming their Social Security benefits.
Social security and health insurance considerations
Your social security and health insurance benefits should be part of your retirement planning. You can work while benefiting from Social Security, but you have to be careful. You should check with the Social Security Administration (SSA) to find out what your full retirement age is.
For example, if you were born in 1952, your full retirement age is 66. If you return to work before your full retirement age and have already applied for Social Security, you can earn $ 18,960 per year without losing your benefits. If you return to work at age 66 or older, you can earn $ 50,520 per year. These figures are subject to change from year to year. It is quite a difference.
If you return to work before your retirement age and after you have claimed, the SSA will deduct $ 1 from your benefits for every $ 2 you earn over the limit. From the year you reach full retirement age, your benefits will no longer be reduced and you will recover them.
However, if you wait to return to work after your full retirement age, the SSA will deduct $ 1 from your benefits for every $ 3 you earn over the limit. Anything you earn when you return to work will also be subject to Social Security tax. Remember that Social Security benefits are based on your highest 35 years of income.
If you return to work and your business offers health savings accounts, you cannot contribute to an HSA if you are enrolled in Medicare. You will need to check and see if the new company’s health insurance plan is Medicare-compatible.
Jobs for retirees
Here are some career ideas for the retiree:
- Independent / Consulting: Some retirees return to their former companies in advisory or self-employed roles. Companies are generally happy to have help from people who know the business well and at a lower cost. Retirees often start their own independent or consulting business and share their expertise in their field with a variety of clients
- Start a business: An offshoot of this idea is to start your own business. Maybe you were in sales and there is a product that you like to sell. You can buy a business or even buy a franchise in the making. You can start your own business as a handyman if you enjoy helping people and working with your hands.
- Brand ambassador: Do you really like a particular brand of product or service? Businesses will pay you to promote their brand.
- Tutor: Share your knowledge with traditional and adult students.
- Customer service representative: Do you like people? Hotels, salons and spas will pay you to show their guests around and talk to them knowledgeably.
- Bank teller: These companies love baby boomers because they are trustworthy and reliable.
- Social media expert: Promoting a business takes a lot of time and skills. Are you good at social media? Businesses will pay you to handle their social media needs.
Many businesses now rely almost exclusively on online placement sites. Here are some sites that can help you land a job and give you tips on finding a job:
The bottom line
Don’t let your retirement stop you from realizing that over the course of your working years, you have developed valuable skills and gained marketable knowledge.
After you retire, you finally have the opportunity to use these skills and knowledge in a way that makes you feel fulfilling. But keep your comprehensive retirement plan in mind: don’t go wrong with Medicare or Social Security.
If you have a 401 (k), plan the withdrawals carefully. If you feel you need help with your retirement plan, talk to a financial advisor.
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