Fears about an uncertain economy, rising prices, and the cost of unforeseen emergencies are encouraging more Americans of retirement age to either keep working or return to work.
One in four Americans say that they'll never retire, and an AARP poll found that 13% of retired people are still working or looking for work.
But is working past your retirement years worth it? Here's a look at what you need to know about working after retirement.
The Pros of Working After Retirement
There are many benefits to working after retirement, whether you're a W2 employee or have started your own business. You can expect the following if you decide you want to keep earning an income:
More Money
Many people are motivated to keep working or return to work for the financial security. This extra income can come in handy for home renovations, a dream vacation, or to cover emergency expenses. If you were receiving an employer match for your 401K plan before you retired, then your extra income can be used for contributions.
However, a downside to this is that you'll pay taxes on your income and you may even have to pay taxes on your social security benefits if you're earning over a certain amount.
Social Stimulation
Loneliness is common among retirees, and working can provide much needed social engagement with others during the day. Sharing laughter and the company of others can work wonders to lift your spirits.
A Sense of Purpose
Continuing a career, especially one that we're passionate about, can give us a sense of purpose and life satisfaction and feel like we're contributing towards the greater good.
And if you've decided to start your own business after retiring, this career move may bring you even more satisfaction.
Learning New Skills
Working helps many of us acquire new skills, whether they're computer-related or teach us how to interact with people.
The Cons of Working After Retirement
Not everything about working past your retirement age is a win-win situation. You may experience some of the following:
Reporting to a Boss
If you're not working as an independent contractor or your own boss, continuing to work past retirement means you'll still be reporting to a supervisor. This may become stressful and frustrating, especially if your manager is significantly younger than you and the two of you don't see eye-to-eye.
Paying More Taxes
Earning an income, even if it's self employment, is still subject to taxes. You may even find that you need to pay taxes on your social security benefits if you earn over a specified amount.
If you're self employed, then you will need to set aside some of your income to cover your tax liability come filing season, or you may find you need to prepay them ahead of time. These retiree tax tips can help clear up some of the confusion about earning an income after retirement.
Is Working Past Retirement Worth It?
There is no easy answer when it comes to working after retirement. It depends upon your individual personal situation and if you have the financial means to afford the cost of living and recreational activities. One thing is for certain: you can always return to full-time retirement if you find a job is not right for you.
Check out our posts on investing to learn how to make the most of your extra post-retirement income.
But is working past your retirement years worth it? Here's a look at what you need to know about working after retirement.
The Pros of Working After Retirement
There are many benefits to working after retirement, whether you're a W2 employee or have started your own business. You can expect the following if you decide you want to keep earning an income:
More Money
Many people are motivated to keep working or return to work for the financial security. This extra income can come in handy for home renovations, a dream vacation, or to cover emergency expenses. If you were receiving an employer match for your 401K plan before you retired, then your extra income can be used for contributions.
However, a downside to this is that you'll pay taxes on your income and you may even have to pay taxes on your social security benefits if you're earning over a certain amount.
Social Stimulation
Loneliness is common among retirees, and working can provide much needed social engagement with others during the day. Sharing laughter and the company of others can work wonders to lift your spirits.
A Sense of Purpose
Continuing a career, especially one that we're passionate about, can give us a sense of purpose and life satisfaction and feel like we're contributing towards the greater good.
And if you've decided to start your own business after retiring, this career move may bring you even more satisfaction.
Learning New Skills
Working helps many of us acquire new skills, whether they're computer-related or teach us how to interact with people.
The Cons of Working After Retirement
Not everything about working past your retirement age is a win-win situation. You may experience some of the following:
Reporting to a Boss
If you're not working as an independent contractor or your own boss, continuing to work past retirement means you'll still be reporting to a supervisor. This may become stressful and frustrating, especially if your manager is significantly younger than you and the two of you don't see eye-to-eye.
Paying More Taxes
Earning an income, even if it's self employment, is still subject to taxes. You may even find that you need to pay taxes on your social security benefits if you earn over a specified amount.
If you're self employed, then you will need to set aside some of your income to cover your tax liability come filing season, or you may find you need to prepay them ahead of time. These retiree tax tips can help clear up some of the confusion about earning an income after retirement.
Is Working Past Retirement Worth It?
There is no easy answer when it comes to working after retirement. It depends upon your individual personal situation and if you have the financial means to afford the cost of living and recreational activities. One thing is for certain: you can always return to full-time retirement if you find a job is not right for you.
Check out our posts on investing to learn how to make the most of your extra post-retirement income.
