More people 65 and older are continuing to work past retirement age, according to U.S. Census Bureau figures. Their reasons for doing so are as diverse as the senior population. Some need the money to supplement retirement savings. Others continue to work to stave off retirement boredom. Still others work in volunteer positions to give back to the community.
Whatever your reason for working while retired, you should be aware of how any earned income may affect your tax situation and Social Security benefits. Generally, the more wages you earn, the more taxes you owe. In some cases, the amount you earn while retired could lower the amount of Social Security you receive.
If you continue to work after you reach full retirement age (log on to www.socialsecurity.gov to determine yours), your Social Security benefits won’t be affected, according to the Social Security Administration. However, if you’re drawing benefits early and earning income, your benefits could be reduced if your earnings exceed certain limits, the SSA says. The good news is, once you reach full retirement age, your benefits won’t be affected no matter how much salary you earn.
You may be unsure if you’ll need to work during retirement. You can check your expected Social Security benefit online at www.socialsecurity.gov. The SSA last year launched an initiative to allow taxpayers to review their anticipated benefits online at any time, rather than having to wait for a paper statement to arrive in the mail.
It’s a good idea to consider whether or not you’ll work when you’re planning for retirement. If you’re already retired and thinking of going back to work, sit down with your financial planner or tax accountant and discuss how work wages will affect your overall financial life.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc. © 2013 ConsumerInfo.com, Inc. All rights reserved.