4 Considerations for Re-entering the Workforce After Retirement

hands-545394_640Entering the job force at any age can be daunting. Strong competition with a still recovering economy leads to a harder time getting employed especially if you are brand new to the workforce or are returning after retirement.

With more Americans having less saved up for retirement more retirees are returning to the job force or working longer. If you are planning on returning to the workforce after retirement, here are some things to keep in mind.

1. Working Longer Means a Greater Payout

Working longer and putting off collecting social security can result in a greater payout past the age of retirement (65-67). By not collecting social security sooner, you receive more of your social security benefits when you do vs. collecting them while working.

In 2015, $1 in benefits will be withheld for every $2 you earn over the annual earnings limit of $15,720. A higher earnings limit applies in the year you reach full retirement age. If you earn more than this limit ($41,880 in 2015), $1 in benefits will be withheld for every $3 you earn over that amount, until the month you reach full retirement age, according to 360FinancialLiteracy.org.

Once you quit working, your social security benefits should go back to their full amount.

2. Opportunity For a Career Change

Many retirees who return to the workforce take this opportunity to change careers or industry, or create their own business. Though when doing this, be sure that you have the right financing to start a business and live off of your savings while your business grows. It could take a while to start making a profit, especially if you are hoping to build a passive income.

3. Retirement Plans from Previous Employers

If you have a pension plan from a previous employer and you go to work for a different company, you shouldn’t run into any problems. If you take a different, lower position with the same company after your retirement, there could be issues. Some pension benefit plans have clauses that the benefit will be suspended should you retire and then come back to work. Before jumping back into working after retirement, check with your HR department to make sure there won?t be any issues.

4. Potential for a Higher Tax Bracket

If you are collecting payments on retirement funds, pension and getting a paycheck, it could bump you into a higher tax bracket. Even getting a job that pays more than what you were getting from your retirement funds could bump you up. Though social security and pension aren?t taxed, you could still be surprised with what you do owe for income tax. Be sure to calculate how much you might owe if you would end up in?a higher tax bracket. This may help you decide if it’s worth it to go back to work or what job to take after retirement.

Jumping into a new position or career after retirement is entirely possible! People do it all the time with great success. As with any new venture, make sure your current finances are in order and consider how this change could affect your finances too. If you have questions especially about retirement benefits, health insurance?or?social security go talk to HR or another professional to make sure you aren?t missing anything. Polish that resume and buy that new suit, you?ve got this!

Do you know anyone that went back to work after retiring? Did you? What are some ways you prepared to go back to work after retiring?


Photo courtesy of: stevepb

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  1. Be aware too that earning “too much” in retirement can create a reduction in the amount of social security benefits you get – while working.

  2. Karan Sharma says:

    Elder care is especially conducive for an older worker because it?s one of the few job categories where there is no age bias.

  3. Addy Brown says:

    Many retirees who take part-time jobs set their budget based on their gross income, but they really should be looking at how much they will keep after taxes.

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