There are plenty of good reasons to hold down a job in retirement. First, the extra income can be nice to have. And for some people -- especially those without retirement savings -- it can actually be a must.
Also, work can serve as a social outlet in retirement. If you don't have friends who are retired, you might easily start to feel isolated if you're the only person you know not reporting to a job every day. And for some people, having a place to go a few days a week can spell the difference between being lonely and bored versus feeling happy and fulfilled.
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Now you may have heard that working is not an option when you're collecting Social Security. But that's completely untrue. And it's important to know that so you can make the right decision if you're contemplating a job in retirement.
Know the rules of working while on Social Security
Not only is working while collecting Social Security permissible, but in many cases, doing so won't impact your benefits at all. Whether your benefits are affected by your decision to work will hinge on two factors: your age and your earnings.
Once you reach full retirement age (FRA), you can earn any amount of money and not have it impact your Social Security income. But FRA doesn't arrive until 66, 67, or somewhere in between. And you can sign up for Social Security as early as age 62. So all told, there may be plenty of opportunity to work while on Social Security before reaching FRA.
In that case, your earnings will dictate what happens to your benefits. You can earn up to $21,240 this year without having benefits affected, but beyond that point, you'll have $1 in Social Security withheld per $2 in earnings. And those withheld benefits won't be forfeited -- you'll get that money back in the form of a higher benefit once FRA arrives. You just won't get it up front.
That limit also rises if you're reaching FRA this year. In that case, you can earn up to $56,520 before having your benefits impacted. From there, you'll have $1 in Social Security withheld per $3 in earnings.
An option worth considering
From a financial standpoint, boosting your income even modestly on a monthly basis could make for a much more comfortable lifestyle. And from a social and mental health perspective, working even one day a week could do a lot of good.
As such, it pays to consider taking a job as a retiree, even if you're already getting benefits from Social Security. In fact, you may want to consider a job even if you technically don't need the money.
In addition to serving as a social outlet, work could also be a source of exercise if it gets you moving more than you normally would. Plus, it could help you stay mentally sharp as you age. And if you're able to work in retirement without impacting your Social Security benefits whatsoever, even better.
