Four Tips for Working Past Retirement Age

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Old man working as a tailor past his retirement age

Many people choose to work into their retirement years. If this is something you're considering, here are some tips to make sure you get the greatest benefit from your efforts.

Consider Delaying Social Security

You can start receiving Social Security retirement benefits as early as age 62, but if you continue to work, it may make sense to delay as late as age 70. Your Social Security monthly benefit increases approximately 8 percent for every year you delay receiving them. These increases in monthly benefits stop when you reach age 70. Social Security benefits may be reduced or be subject to income tax due to your other income.

Don't Get Bracket-Bumped

You may have multiple income streams during retirement that can bump you into a higher tax bracket and make other income taxable. For instance, Social Security benefits are only tax-free if you have less than a certain amount of adjusted gross income, otherwise up to 85 percent of your benefits are taxable. Required distributions from pensions and retirement accounts, which you are required to take at age 70 1/2, can also add to your taxable income. Be aware of how close you are to the next tax bracket and adjust accordingly.

Be Smart About Healthcare

When you reach age 65, you'll have the option of making Medicare your primary health insurance. If you continue to work, you may be able to stay on your employer's health care plan, switch to Medicare, or adopt for a two-plan hybrid option that includes both. Consider these options to determine which makes the most sense.

Consider Your Expenses

If you're reducing your working hours or taking a part-time job in retirement, consider the cost of your extra income stream. The costs of parking every day, meals, clothing, dry cleaning, and any other expenses should be considered in determining your pre-tax income.

These are just a few factors to consider. Give us a call if you have questions.


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Disclaimer

The information in this article is written as accurately as possible and to best of the writer's knowledge. However, there may be omissions, errors, or mistakes. Because of this and changes in circumstances, the information in this article is subject to change. This article is for informational purposes only and should not serve as professional, financial, medical, emotional, and/or legal advice. Readers may rely on the information on this article at their own risk, but they should consult a CPA, financial expert, or other professional for advice. Givilancz & Martinez, PLLC reserves the right to change and handle this article series, and therefore, may remove or alter any part of this article or the comments section. Any comments inserted by readers are not the responsibility of G&M PLLC and do not represent the thoughts or ideas of G&M PLLC.