A SECOND ACT: Financial Benefits of Working in Retirement
Strategic retirement: why working longer pays off
Retirement often signals the end of a career, but it doesn't mean you have to stop working entirely. Many retirees find fulfillment in transitioning to a less demanding role. If you’re unsure about continuing to work, switching to part-time, or fully retiring, you’re not alone. Here are some benefits of working a bit longer in retirement:
Boost Your Nest Egg
Earning a paycheck longer allows more time to save and invest. You can make catch-up contributions to retirement accounts and benefit from employer 401(k) matches. Continued investment growth can help you manage future market volatility and support your desired retirement lifestyle.
Healthcare Planning
Approaching retirement means planning for how to maintain healthcare insurance coverage while costs for care are on the rise. Staying employed may allow you to remain on an employer’s health plan. Starting at age 65, you can register for Medicare. Do your research to ensure you understand what expenses are covered by Medicare Parts A and B, and drug insurance (Part D) and consider if you need to purchase supplemental insurance to fill in any coverage gaps. Also, review your long-term care policy, health savings account (HSA) or other designated healthcare funds, so that you know how you can handle potential health expenses.
Maximize Social Security
Retirement income often comes from a complex patchwork of sources, and a key income source for many is Social Security. Working a year or two into or beyond retirement to attain supplemental income can allow you to delay the starting date of Social Security. Each year you delay, your overall benefits from Social Security increase, which can help establish an income cushion for your later retirement years. Keep in mind that Social Security benefits max out at age 70, so working beyond then may not be to your advantage.
Figure Out What's Next
Retirement is about more than money — it’s about purpose. Use this time to explore part-time work, volunteering, or hobbies that bring meaning to your life.
Talk to a Financial Advisor
Working longer can offer financial and personal rewards. A trusted advisor can help you determine the right time for you to leave the workforce.
Kurt Kern, APMA®, CRPC™, is a Financial Advisor with River Prairie Wealth Partners, a private wealth advisory practice of Ameriprise Financial Services, LLC. in Altoona, WI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 32 years. He can be contacted online, in person at the below address, or by calling the below phone number.
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River Prairie Wealth Partners
Address: 1520 Front Porch Pl., Altoona
Phone: (715) 832-7715
Website: RiverPrairieWealthPartners.com
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