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3 Ways to Make the Most of Working in Retirement

By Kailey Hagen – Sep 7, 2021 at 7:07AM

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Working in retirement doesn't have to be a drag.

Almost two in five Americans plan to work in retirement, according to a recent Transamerica survey. That might not sound like a retirement at all to you, but for those who have been struggling to save as much as they would like for their future, it could be their only choice.

But working in retirement doesn't have to be as tedious as working toward retirement. Try these three techniques to get the most out of your post-career job.

Senior worker talking on phone.

Image source: Getty Images.

1. Find something flexible

Working in retirement may not feel as constraining if you can find a job that offers you flexibility you don't have now. This could include the option to work from home or to set your own hours. Some jobs may enable you to work part time instead of full time as well. 

If you're nearing retirement age and you like the job you have, you can talk to your employer about what kind of additional flexibility it can offer as you transition to this new stage in your life. But your employer may not be willing to accommodate you. In this case, you'll have to seek out a new job somewhere else. Begin your search in advance of your chosen retirement date so you can transition smoothly without a loss of income.

Another option is to start a business of your own. This gives you complete control over when and how you work. It can also bring in quite a bit of money, but it may take a while to establish yourself. You might want to begin this process before you quit your regular job to ensure your business is strong by the time you retire.

2. Choose something that's in line with your interests

A high salary is especially important when you're younger because it makes saving for your long-term goals much easier. But this might not be as important for those working in retirement. You may only need a small income to help supplement your personal savings. 

This gives you more freedom to choose a job that's in line with your interests. That can help make the job feel less tedious than the one you worked at for years just to earn an income. 

Think about the activities you enjoy and whether any of those could translate into a career. You may have to think more broadly about what the hobbies you enjoy have in common. If you like working with others, you may want to choose a position that involves a lot of face-to-face contact with customers. Or if you enjoy working with children, you might consider tutoring, babysitting, or substitute teaching. 

3. Be strategic about Social Security

Social Security is another income source you can use to supplement your personal savings, and if you play it right, you can reduce your reliance on your paychecks from your retirement job. You may even be able to transition to complete retirement eventually.

How much you get from Social Security depends on how much you earned during your working years and your full retirement age (FRA). This is between 66 and 67 for today's workers. You must wait to claim benefits until this age if you want the full amount you're entitled to based on your work history. Starting before this age reduces your checks while delaying benefits past this age increases them.

If you're comfortable working early in your retirement, you may be able to delay Social Security until 70 when you qualify for your maximum benefit. Then, you'll receive larger checks each month. This could enable you to retire or reduce your hours at your job. However, it only makes sense if you believe you'll live past your mid-80s. If not, you'll get more money out of the program overall by starting early.

Workers who decide to claim benefits while under their FRA need to be careful about the Social Security Earnings Test. This takes $1 from your checks for every $2 you earn over $18,960 in 2021 if you're below your FRA for the whole year. Those who will hit their FRA in 2021 lose $1 for every $3 they earn over $50,520 if they hit this amount before their birthday.

This money comes back to you in the form of slightly larger checks once you hit your FRA, but your benefit won't be as large as it would've been if you'd just delayed Social Security until your FRA in the first place. Explore a few different scenarios and decide which makes the most sense for you. You can always change your mind as you get closer to retirement.

Income is always a big concern with any job, but when you're talking about working in retirement, you also have to think about how the job fits in with the lifestyle you want. Don't feel like you're locked into one thing. You can change careers a few times if you need to, until you find something you're happy with or you're able to retire completely.

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