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Working Longer May Help You Prosper

No one typically dreams of toiling away at the office after they’ve hit full retirement age. It’s tempting to jump ship on your 66th birthday (for those born between 1943 to 1954), but working for a few more years may make a big difference in your post-retirement lifestyle.

Life expectancy has increased dramatically in the past 100 years, and more and more of us are joining the over-90 crowd. That’s great news, but it also means that Americans need to think about how to provide for a retirement that could last 30 years or more.

Benefits of working longer

A steady paycheck gives you more time to save and allows the nest egg you’ve already accumulated the opportunity to keep compounding.

It can also be worth prolonging your career to keep the benefits from a full-time job, such as the 401(k) company match and group life insurance. Employer-sponsored disability coverage usually stops when you hit 65.

Employer health insurance is another benefit to consider. Your employer insurance may be better and cheaper than Medicare, which you’ll qualify for at 65. When you do retire, you can enroll in Medicare coverage you choose without penalty or having to wait for open enrollment.

Social Security

If you choose to keep working, you can still add to your income by taking Social Security at full retirement age. You won’t be subject to the earnings test, which only applies if you claim benefits early. However, the money you earn at work could trigger taxes on up to 85 percent of your Social Security benefit. It may be better to let the SS benefit grow than to pay tax on income you don’t really need right now.

If you already retired and claimed benefits but went back to work and don’t need the extra income, you can undo your claiming decision by repaying the money within a year of enrolling.

Other options

Staying longer at your current job isn’t your only option—you could opt to work full time in another field, perhaps one related to a hobby, or shift to part-time work. Just know that in addition to reducing your income, working fewer hours could affect your eligibility for employee health benefits.

If you’re wondering how to stretch your savings through retirement and are in good health, keeping your day job is a choice to consider seriously.

Carolyn Yates can be reached at 615-743-6040, carolyn.yates@pnfp.com or 2307 Crestmoor Dr., Nashville, TN 37215.


Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC, an independent broker/dealer and are not insured by the FDIC or any other government agency, are not deposits, not guaranteed by Pinnacle Bank and are subject to risk and may lose value. Pinnacle Asset Management and Pinnacle Bank are independent of RJFS.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Carolyn Yates and not necessarily those of Raymond James. You should discuss any tax or legal matters with the appropriate professional.

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