While retirement is a lifetime dream for many workers, some people are deciding to continue working for as long as they can.
Approximately a third of baby boomers say they plan to work until past age 70 or never fully retire at all, according to a survey from the Insured Retirement Institute. Also, around 17% of retirees return to work after a while of not working, a survey from staffing solutions firm Adecco found.
Sometimes people continue working during retirement because they’re enthusiastic about their careers, but other times retirees are forced to pick up part-time jobs because they don’t have enough savings to make ends meet. Working during retirement can be a smart move, particularly if your savings are lacking, but if you’re also going to be depending on Social Security benefits, it’s important to understand how your income can affect your monthly bills.
Retirement and claiming Social Security benefits often go hand in hand, but they don’t certainly have to happen simultaneously. The earliest you can claim Social Security is age 62, but you’ll receive more money in each check if you hold off on claiming benefits, up until age 70.
The age at which you claim benefits doesn’t have to align with when you retire. You could retire at age 50 and wait to claim benefits until age 70. Or you could file for Social Security at age 62 and work until you’re 90. Many people choose to claim profits when they retire because they need the extra income, but if you continue working after you file for Social Security, either part-time or full-time, your monthly benefit amount could be reduced or withheld altogether if certain conditions are met.
Whether your profits are reduced depends on a couple of factors, including your full retirement age (FRA) and how much you’re earning. Your FRA is age 66, 67, or somewhere in between depending on the year you were born, and if you claim Social Security at this age, you’ll receive the full profit amount you’re probably entitled to.