Considerations for retirees thinking of working part-time
Re�rement is an opportunity to wave goodbye to the daily grind. Re�rees may focus on rest and relaxa�on, and many make travel a major component of their lifestyle.
According to a 2022 Gallup poll, Americans expect to re�re at an average age of 66, up from 62 in 2022. However, most do not hold out that long; the average actual re�rement age is 61. Canada used to have a mandatory re�rement age of 65, but that mandate was overturned in 2009. Today, the average re�rement age for Canadians is 64.4 for men and 63.8 for women, according to Sta�s�cs Canada.
Upon re�ring, many re�rees discover that they sorely miss ge�ng out of the house and being produc�ve through some sort of employment. Others may find it necessary to supplement their re�rement incomes. There are a few things to know about working during re- �rement, par�cularly if a person is collec�ng government benefits.
• According to the Social Security Administra- �on, those falling under full re�rement age for the en�re year( which was raised to age 67 for those born in 1960 or later) will be subjected to an SSA deduc�on of $ 1 from your benefit payments for every $ 2 you earn above the annual limit. For 2022, that limit is $ 19,560. In the year you reach full re�rement age, SSA deducts $ 1 in benefits for every $ 3 you earn above a different limit, but they only count earnings before the month you reach your full re�rement age. For full re�rement age reached in 2022 your limit on earnings for the months before full re�rement age is $ 51,960. A�er full re�rement age, there is no limit on earnings.
• The Financial Consumer Agency of Canada reports that individuals between the ages of 60 and 65 who con�nue to work while receiving a Canadian Pension Plan( CPP) re�rement benefit must s�ll contribute to the CPP. Your CPP contribu�ons will go toward post-re�rement benefits. These benefits increase your re�rement income when you stop working. However, if you con�nue to work while ge�ng a CPP re�rement pension and are between the ages of 65 and 70 years old, you can choose not to make any more CPP contribu�ons.
• Keep in mind that if you are on Medicare, extra income could poten�ally trigger surcharges for parts B and D. It’ s beneficial to speak with a financial consultant to weigh the pros and cons of part-�me work during re�rement.
• Part-�me work does not need to be daily work. Many re�rees work according to how they feel. Some op�ons include seasonal jobs, such as driving shu�les in na�onal parks or working during the holidays in retail stores. Or you may use your exper�se to consult or start a business.
• A number of people work part-�me during re�rement simply to get out of the house. Jobs that help you interact with a number of people can be beneficial, as socializa�on has been shown to benefit the mental health of seniors. Working during re�rement can supplement savings and provide structure that some re�rees may be missing.
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