Most importantly, if you go back to work prior to full retirement age and earn a certain level of allowable income, your benefits will be reduced by $1 for every $2 you make above that level. Your full retirement age varies based on the year you were born, but is likely 66-70. As of 2016, the allowable income you can earn while receiving full Social Security benefits is $1,310 per month, or $15,720 per year.
You’ll need to report expected monthly income while receiving benefits. It is this number that will be used to determine the monthly reduction in your Social Security payment. If your income turns out to be different than reported, you will either owe additional taxes or be given a tax rebate after filing taxes.
If you retire, start receiving benefits, and decide to go back to work within a year, don’t worry. You can stop the benefits dispersal, pay back what you were given, and maintain the ability to receive benefits when you retire for good.
For instance, if you set up a 401(k) or IRA that deferred income tax until it was withdrawn from the account, the financial incentive for doing so was the assumption that you’d be in a lower income bracket after retirement. Essentially, you may wind up paying more (in taxes) to access the money in your retirement savings accounts. Outline a basic after-tax budget. Make an estimated bottom line assessment of how going back to work will ultimately affect your annual income. [7] X Research source
You may even be able to work a part-time job that qualifies you for access to your employer’s group health care plan. You will be penalized by an excise tax every year you do not have health insurance. As of 2016, these penalties are increasing annually. Make sure you are always insured. Even with Medicare, having additional coverage through an employer will help cover expenses that Medicare does not cover.
For instance, if you have been well-paid previously, but decide to go back to work on a part-time basis, for instance, this may significantly diminish what you will receive from your pension. To avoid this from occurring, speak directly with whomever oversees pensions for your employer, and ask about how coming back to work may change your future pension.
Further, are there any other people or pets that depend on your care during the day? Might you have to pay for pet boarding or a day nurse for your spouse?
Staying inspired and informed well into full age won’t happen on its own. Not only does working offer the opportunity to keep your mind and body active, it keeps you engaged with others.
Simply put, purpose, self-worth, and identify often come from your career. Many people are happier getting up and going to work. If you find yourself feeling restless during retirement, going back to work may be exactly what you need.
If you find yourself sitting around and becoming restless, start searching for a position that interest you. If you’d been physically active during your career, look into jobs that will also incorporate some physicality. Once great option is working at a park.
