Many people plan to work at least part-time in retirement because they want the income, enjoy what they do, hope to keep active or need a sense of purpose — or some combination of those reasons. But working in retirement can come with some unexpected costs and hazards. Here are commonly asked questions that can help you plan for what’s ahead.
CAN I COLLECT SOCIAL SECURITY AT 62 AND STILL WORK?
Yes, but collecting Social Security early probably isn’t the best option if you earn very much.
When you start Social Security before your full retirement age — which is currently 66 and rising to 67 for people born in 1960 and later — you will lose $1 of benefits for every $2 you earn over a certain amount ($17,640 in 2019).
That money would be added back into your checks over time, starting when you reach full retirement age. But in the meantime, you will have locked in a permanently smaller basic benefit. If you had put off starting Social Security, your benefit could have grown about 7% a year. There’s nowhere else you can get such a high, guaranteed return, so it’s usually worth waiting if you possibly can.
WILL WORKING LONGER INCREASE MY SOCIAL SECURITY BENEFIT?
Delaying the start of Social Security will increase your checks by roughly 7% to 8% each year you put off your application (until age 70). Delaying could help in another way, as well. Social Security bases your benefit on your 35 highest-earning years. If the amount you earn exceeds an amount you made previously, that could boost your benefit somewhat. People who have several years of low or no income among those 35 years are the ones most likely to benefit from working longer. See the rest of the story at nerdwallet.com