What to Know if Working in Retirement


unsplash-business man 2b

Are you at retirement age and still working? You are not alone. Trends are indicating that more older individuals choose to continue to work either full time or part time once they reach retirement age.


Many individuals continue to work because they need the income to cover daily bills and health care expenses. Others use their job to fund activities such as travel and hobbies.

Often retired individuals use their job to create valuable structure to their day. Their job provides the mental stimulation that comes from interacting with co-workers and using their problem-solving skills. Similarly, many continue to work due to the personal fulfillment they find through employment.


According to the Social Security Administration, more than nine out of ten individuals age 65 and older receive Social Security benefits. But most retirees also rely on other sources of retirement income, as shown on this chart (1)

Source of Retirement Income


Depending on when you begin receiving your Social Security benefits, your earned income may affect the amount of Social Security income you will receive.

For example, if you begin to receive Social Security retirement (or survivor’s) benefits before you reach full retirement age, money you earn over a certain limit will reduce the amount of your Social Security benefit. In 2019, your benefit will be reduced by $1 for every $2 of earnings in excess of $17,640.

The chart below shows the effect of annual earnings of $10,000, $20,000 and $30,000 on a $12,000 annual Social Security benefit ($1,000 monthly) for someone who hasn’t yet reached full retirement age.(1)

Social Security earnings


It’s important to remember any income you earn in retirement – whether it’s income from pensions, employment, dividends, benefits – is taxable at standard rates. It may be possible that all these sources of income collectively will push you into a new tax bracket, especially if combined with distributions from your 401(k), IRA or a pension.

If you have already begun taking Social Security benefits and you continue to work, your Social Security income may be taxed as well.

Many people under 65 decide to go back to work just to qualify for affordable health care coverage.  Once you turn 65 you will automatically be eligible for some Medicare overages.

If you have opted to take Medicare coverage or decide to wait be sure to carefully research how your employers’ benefits will work with your Medicare overages.


As you near retirement and beyond, be sure to talk to experts before you make changes regarding your income. At Kuderer Financial we help our clients make financial decisions with confidence by reviewing their needs and goals before putting together a simple 3 step process to move forward. Setup a consultative meeting today to get started.

1) Broadridge Investor Communication Solutions, Inc.