You Can Come Out Of Retirement And Work Again

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Another voice has joined the chorus of those proposing an increase in the retirement age. Nikki Haley, who has declared her intention to run for the Republican Party presidential nomination in 2024, announced her willingness to raise the retirement age for Social Security and Medicare during a political event in Iowa. She adds her support to an idea that has recently become the rage in the halls of Congress.

There have been built-in increases in the retirement age for Social Security for some time now. Those increases, however, end with people born in 1960 and beyond. Despite a recent blip down because of Covid, life expectancies have steadily risen.

"The reason why there is so much talk about raising the retirement age is because people are living longer than ever before," says Dennis Shirshikov, the head of growth for Awning.com in New York City and a professor at the City University of New York where he teaches finance, economics, and accounting. "As life expectancy continues to increase, it only makes sense that retirement age should also go up."

Some workers can only continue for so long before they must stop that line of work. Professional athletes represent the most extreme example of this. There are other types of work that stress the body both physically and mentally in such ways as to lead to shorter careers. This suggests significant consequences should the retirement age be lifted.

"I believe there is a legitimate question of fairness if we are talking about the Social Security retirement age," says Clint McCalla, senior wealth manager at LourdMurray in San Diego. "The physical toll that each profession takes is very different. For people who work in a labor intensive trade, it makes absolutely no sense to raise their retirement age from where it currently stands, or to make these individuals go through a burdensome disability filing process to claim those in the interim."

Still, other jobs, particularly side hustles and other modestly sized entrepreneurial ventures that fulfill your lifetime dream, may cause you not to want to stop working. After all, isn't that the only real definition of success? With these, you can happily continue with them well past the traditional retirement age. Indeed, they may make the very notion of retirement moot.

"The concept of retirement was first introduced by many governments as a way of encouraging older people to leave their jobs and make room for the next generation," says Doug Dahmer, CEO and founder of Retirement Navigator in Burlington, Ontario. "These days, there is a highly likely probability that retirement will disappear for past socio-economic reasons. Significantly longer lifestyles are causing huge increases for governments to cover retirement income programs. With information coming out that there will soon be more retired people than workers, it will be necessary to encourage older people to remain employed. Most jobs no longer have the high physical demands of previous generations, and therefore older people are no longer seen as less productive, and in fact, their wisdom, reliability and work ethic are sought after. In all, retirement is simply a human created enigma which for practical reasons can be continually modified to suit the general well-being of the general population."

It may sound strange, but people are returning to work after retirement. This is especially true now as inflation has created an urgency to increase post-retirement income.

"Working after full retirement age can help you make sure you are in a better position financially for the rest of your life," says Lawrence Sprung, founder of Mitlin Financial in Hauppauge, New York.

There are many reasons and many ways to go back to work after retirement. Not only might you desire additional income, but you might find yourself in need of that greater social engagement that work provides. Maybe you have just grown tired of the boring day-to-day routine. It could also be that your hobby has grown to where you've learned how to make money from it.

Once the opportunity arises, you may very well wonder if you're allowed to work again after you've "retired." Well, "retirement" can mean different things to different people. It may mean leaving your lifelong career. It doesn't necessarily mean starting to collect Social Security.

"You are able to turn on Social Security without any sort of penalty after full retirement age," says Chris Kampitsis, a financial planner at The SKG Team at Barnum Financial Group in Elmsford, New York. "Alternatively, working allows you to continue to defer it so that the payment is significantly bigger once it is necessary to replace your income."

Social Security, though, represents only one thing that can be affected should you decide to work after you "retire." You should try your best to assess the ramifications well before you start earning post-retirement income.

"If you work after full retirement age, the number of benefits you receive may be impacted," says Derek Miser, investment advisor and CEO at Miser Wealth Partners in Knoxville, Tennessee. "Depending on your earnings, you may have to pay taxes on a portion of your Social Security benefits or have your benefits reduced. If you are collecting an employer pension and work after full retirement age, you may have to wait until you reach a certain age to be eligible for full benefits. It is important to understand the implications of working after full retirement age before making any decisions."

This is the biggest question people have. The simple answer is "yes."

"After reaching full retirement age, there is no impact on Social Security income," says Emily C. Rassam, senior financial planner at Archer Investment Management in Charlotte, North Carolina.

The more complicated answer is "yes, but...."

"You can get Social Security retirement benefits and work if you are past the full retirement age," says Robert Reilly, a member of the finance faculty at the Providence College School of Business and a financial advisor at PRW Wealth Management in Boston. "However, if you are younger than full retirement age and make more than the yearly limit, your benefits will be reduced."

Remember that comment earlier about fulfilling your lifetime dream? That's the ideal job. It's usually in the form of a side hustle or similar lower stress gig. There are as many kinds of post-retirement jobs as there are retirees.

Which one do you imagine yourself doing? Do you have what it takes to be an entrepreneur? Or would you rather sit back, relax, and enjoy greeting people? Any job will do. It's up to you.

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