Thinking of returning to work? Here’s what to consider

The financial burdens on everyone, especially retirees, have increased due to historical inflation. For many retirees, the nest fund that appeared so secure only a few years ago may now seem woefully inadequate; rather than face the financial risk, they are at least considering a return to the working.

Though the promise of a regular income is undoubtedly compelling, it’s not the only consideration for retirees considering returning to the workforce.

Think about how working again will affect your new lifestyle, how it could affect your Social Security payments, and whether or not a compromise like part-time work is an option.

Further information on each of those elements is provided below.

Transforming Your Way of Life

The most significant noticeable difference is the reduced leisure time returning to work. If you’re used to doing everything you want whenever you want, this may feel like a significant change. Yet, if you are in a dire financial bind, it may be the better option.

If you make the decision to go back to work after retiring again, you should have a strategy for how long you want to be employed. The alternative would be to return to school on a less-than-full-time basis. Doing either of these activities eases your mind about making sacrifices in your leisure time.

How will this affect Social Security checks?

Claimants under full retirement age and continuing to work after receiving a Social Security payment may have that benefit reduced (FRA). For today’s workers, that age ranges from 66 to 67. If you earn more than a specified amount while still under your FRA, a portion of your Social Security payments will be withheld to cover the program’s cost.

If you expected to earn under your FRA in 2024, you would see a reduction of $1 in your Social Security payments for every $2 in earnings beyond $19,560. If your FRA was in 2024 and you meet it before then, you will only lose $1 for every $3 you make over $51,960. Once you reach your FRA, the state will recalculate your benefit, and future payments will be higher to make up for the money withheld.

Yet, the income test could be an issue if you counted on collecting your maximum Social Security check upon returning to employment. Consider how this could alter the money coming into your home. Furthermore, you may postpone enrolling in Social Security if needed. The longer you wait for benefits, the larger they will eventually become.

There are other choices out there.

It may feel like the only option is to come out of retirement, but that’s not always the case. If you’re prepared to adjust your finances, you can stay in retirement. It’s possible to cut back on extraneous activities like vacations and shopping trips so you can pay attention to what’s truly important.

And if that isn’t enough, check into state and federal assistance programs. National supplemental security income (SSI) is available, for instance, for the elderly who are blind, crippled, or otherwise financially disadvantaged. This monthly payment can be used in the same way as Social Security benefits. Use the Benefits Eligibility Screening Tool to determine your eligibility.

Find out what local and state aid you might qualify for. Housing, medical care, and food costs can be challenging for people with low incomes and the elderly, but there may be programs that might help. When added to your savings, this could help you enjoy retirement.

Deciding to go back to work is significant, and while you can always change your mind, you generally will only want to do so sometimes. Make sure to give the considerations mentioned above some thought before acting. To make coming to work less of a drag, it’s best to find a job that allows you some degree of freedom or is directly related to your expertise.