Enjoying a full and ongoing retirement is a traditional approach to one’s golden years. However, many seniors are choosing to return to work for a variety of reasons after their initial retirement. Whether choosing to return to work soon after retirement or years later, part-time or full-time, if you are a senior in Florida, this is what retirees returning to work need to know.
Why Do Retirees Return to Work?
There are many reasons why retirees return to work after formally leaving the workplace. For some, it is a financial need. Fluctuations in the market may affect retirement savings or stock options that were part of one’s nest egg. In addition, rising prices and healthcare costs encourage some seniors to add to their existing savings by working while they are still healthy and able to do so.
In addition to practical financial reasons, some retirees return to work for their well-being. Loneliness is a risk factor for some seniors who may find themselves missing the social interaction with others that they enjoyed while working. A final reason seniors note returning to work is that employment outside the home allows some seniors to increase their physical activity.
Returning to Work & Social Security
While returning to work may seem as simple as finding a position that fits your needs and abilities, there are financial impacts to consider. Social Security is an important monthly retirement benefit for most retirees. If you are in your sixties and not yet receiving monthly benefits, returning to work may allow you to wait longer to draw the benefit. Waiting to draw social security has a large incentive. The difference can be up to 30% less per check between claiming retirement at 62 (the earliest retirement age) and waiting until 66 (full retirement age) or even older to increase your monthly benefits.
However, if you are already receiving Social Security checks, there will be an earnings limitation on what you can earn after retirement. If you’ve started taking this benefit within the past year, you may be able to withdraw your application. However, if it has been a longer period of time, you will need to attend to these income thresholds so as to not be penalized. To read more on how your age impacts these limits, link here.
Returning to Work While Drawing on Previous Savings
Some retirees returning to work also draw upon pensions or retirement income from their earlier careers. Whether done to supplement part-time work or to allow the retiree to do something they want to do but doesn’t pay especially well, this can be a way to supplement the full cost of living a senior needs. However, if as a retiree you want to consider drawing upon pensions or previous career savings, you should check the rules of the company’s retirement systems where the money was earned. These extra steps may seem tedious, but they help to ensure pension checks will not be reduced or stopped if choosing to return to work.
Additional Considerations for Retirees Returning to Work
There are a lot of options for retirees to continue to save, take advantage of age 50+ catch-up contributions to 401(k)s and IRAs, age-related tax deferments, and find ways to affordably navigate access to medical insurance. For a consultation regarding the specific circumstances of your return to work in Florida, contact our knowledgeable elder care attorneys.