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Retirement Hacks: Need more money in retirement? Try a part-time job


Not everyone has had the chance to save enough for retirement, or they may have plenty of money but find themselves bored—a part-time job can help in either of those instances. 

Retirement tip of the week: If you’re worried you’re taking too much money out of your retirement accounts, or you’re looking to amplify what you’ve already saved, consider taking on a part-time job or gig work to generate extra cash flow.

A job in retirement, even if it’s only for a few hours a week, can bring retirees plenty of perks. One of the biggest, of course, is more income, which allows retirees to draw down less from their retirement savings, thus allowing those investments to continue to grow over time. In some cases, retirees may even be able to add more money to their savings or investment accounts, or splurge on a big trip or dream goal. 

But there are other benefits to a part-time job. For example, depending on the employer, early retirees may be eligible for healthcare if they’re not yet 65 and waiting to start Medicare. 

See: I retired at 50, went back to work at 53, and then a medical issue left me jobless: ‘There’s no such thing as a safe amount of money’ 

Retirees can translate their current skills or past work experience into a part-time job. Some possibilities include consulting work, while others may get more crafty such as starting a small business on Etsy. Some people may want to completely pivot from what they used to do for work, while others are interested in taking on a customer service role at a local shop to bring in extra money. The options are limitless. 

A quick caveat for those already receiving Social Security benefits before their Full Retirement Age: make sure you’re not going over the earnings threshold, or you might see some of your benefits reduced. In 2022, the earnings threshold is $19,560 for people before their Full Retirement Age—the Social Security Administration will deduct $1 for every $2 earned above that amount. For retirees who are in the year of their Full Retirement Age (for example, they reach their FRA in August but are working the seven months before that), the limit is $51,960—benefits are reduced $1 for every $3 above that. 

Also see: Will ‘unretirement’ solve the labor shortage? 

There is no earning threshold once Full Retirement Age has been reached. At Full Retirement Age, the Social Security Administration will also give a credit for the reductions in previous months. 

Retirees working should also be wary of how much they’re withdrawing from their retirement accounts and the tax consequences of doing so while earning extra cash. Depending on the type of account, withdrawals are taxed (such as in a traditional IRA or a 401(k)), and earning a lot more could push taxpayers into a higher tax bracket. Social Security benefits may also be taxed, depending on separate thresholds. Consider working with a financial adviser or CPA to navigate the impact of a part-time job on taxes. 

There are plenty of resources to help retirees get back into the workforce, if only temporarily or minimally. AARP offers a job search site and advice on getting back to work, and local or state departments of aging may also have services to find employment.

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