Working After Retirement: Things to Consider

Summary: Working after retirement can provide some extra income while allowing you to become a part of a community.

You don’t have to stop working for good when you retire. Whether you need extra income or want to be a part of a community, working after retirement offers several perks. In fact, some jobs are more suited for people who are in their retirement years.

Before you commit to a job, consider a few key factors that can help you land the perfect career.

Why do you want to work after retirement?

It’s good to establish your goals for working after retirement and plan your finances before you commit to a job. Basic objectives include making more money and meeting new people, but you should rank them by importance.

For instance, some retirees may work a fun seasonal job, as these jobs help pay for travel and allow longer stints of time in between working to enjoy more travel. Amazon and Target hire many seasonal workers during the holiday season due to the higher order volumes that come at the end of the year.

Some retirees only need some extra money to cover living expenses and prioritize meeting new people. In this case, it’s better to look for low-stress jobs after retirement that only require part-time hours.

Can you work after retirement and collect Social Security?

Anyone can return to the workforce after they retire, even after the Social Security paychecks start to arrive. However, up to 85% of your Social Security benefits are subject to taxation depending on your income and filing status.⁽¹⁾ Visit the Social Security website to learn more about your taxable income and benchmarks that determine the amount.

Those benchmarks include your Social Security, income, and cash flow from investments, among other income sources. While working during retirement can result in additional taxes on your Social Security benefits, you’ll end up with more money in your bank account. It’s good to speak with a financial professional and your tax advisor to see how working in retirement will impact your taxes.

Low-stress jobs after retirement

Low-stress jobs after retirement give you the flexibility to work at your own pace instead of adhering to a strict schedule. Some jobs require you to clock in and clock out, but you can pursue a part-time career to minimize stress. These are some of the part-time lower-stress jobs to consider:

• Tutoring: You can tutor students online or in person, depending on whether you want to commute. This lets you teach a variety of skills and watch your students improve.
• Retail work: This occupation can be less stressful if you only work part-time and take big holidays off. It’s easier to take off on days like Black Friday if you are a part-timer. Retail work is a great way to meet others and usually involves some light physical activity, helping you stay active. If you have a lot of flexibility in your schedule, overnight shifts tend to be less stressful than morning shifts since retail stores are less crowded at night.
• Dog walking: Apps like Rover make it easy to connect with people who need help with walking their dogs. You can also get some good exercise from this income stream.
• Tour guiding: Retirees who live in big cities can show off their favorite spots to tourists. Being a tour guide will help you learn more about your area and get in a few walks each week. You can find opportunities through local tourism boards, companies like ToursByLocals or Airbnb Experiences or by joining senior-focused travel networks that welcome retirees as guides.
• Creative work: Skillsets like freelance writing, transcribing videos, and graphic design allow you to serve several clients from the comfort of your home. If you don’t want to make long commutes and are okay with meeting people online, a low-stress job in the creative industry may be right for you. You can look at job listings on sites like Upwork and list your services on Fiverr to gain some traction.

The benefits of working after retirement

Working after retirement presents several benefits. These are some of the top perks:

• You can prioritize low-stress jobs: You don’t have to work full-time or take on a 1-hour commute both ways. Social Security offers some financial relief, and if you’ve saved wisely over the years, you may have a nest egg. A part-time job is more viable now than it is for someone in their 30s since retirees tend to have more financial security than young adults.
• Your savings may last longer: As the cost of living increases and people live longer, it’s become possible for people to outlive their retirement savings. Working after retirement gives you an extra income source that may help protect your nest egg.
• You get to meet new people: Loneliness is an epidemic, and that becomes more true for retirees.⁽²⁾ When you retire, you lose the community you established at your previous job. However, getting back to work can reintroduce you to new colleagues and improve your mental health. Some positions also allow you to interact regularly with customers.
• Workplace benefits: You may have your health insurance covered and receive 401(k) matches and other advantages. While fewer jobs offer these benefits to part-time workers, you can filter your search to companies that offer these benefits. For instance, Costco employees are eligible for health, dental, and vision benefits after working at least 20 hours per week for 6 months.⁽³⁾

The drawbacks of working after retirement

While working after retirement offers many advantages, it’s also good to keep the drawbacks in mind before committing to it.

• Your Social Security benefits get taxed at a higher rate: The amount of taxes you owe on Social Security depends on your annual income. A part-time job will increase your earnings and may make more of your benefits eligible for taxation.
• You may lose some flexibility in your schedule: You won’t have as much free time if you work at a job. Furthermore, you may have to ask for permission to go on a vacation. Each company has different policies about how many off days you can take.
• You still have to take out required minimum distributions (RMDs): If you are 73 years or older, you still have to take out the required minimum distribution from your retirement accounts. For traditional retirement accounts, that means reporting additional taxable income. These distributions, combined with Social Security benefits and your new salary, may increase the taxes you owe. Luckily, you don’t pay any taxes on withdrawals from Roth retirement accounts.

Embark on a new career path after retirement

Getting a low-stress job after retirement can be quite beneficial. You can increase your income, meet new people, and stay active. Plus, you can choose jobs that align with your preferences. Retirees who already have nest eggs don’t have to rush to work at a high-pressure job that pays well and opt for something more laid back instead.

At Mutual of Omaha, we’re committed to making your post-retirement life smooth and enjoyable. We strive to help ensure that you have enough opportunities for personal growth and building connections.

FAQs

Q1: Am I ready for retirement?

You should check your finances and compare them with your expected monthly expenses to gauge whether you are ready for retirement. A good retirement calculator can help you determine how much you need before leaving your full-time job. You can speak with a Mutual of Omaha financial professional to assess if you are ready. Use our directory to find the right agent for you.

Q2: Can you have a good work-life balance if you return to work?

Yes, it is possible to have a good work-life balance after you return to work. Individuals can choose from remote work, part-time opportunities, hybrid models, and other arrangements.

Q3: How can I advance in my career?

You can help advance in your career by networking, developing new skills, and taking on new challenges. Some people want to continue working during their retirement years and can continue to grow their careers.

Footnotes:

1. Social Security, Income Taxes and Your Social Security Benefit
2. Weill Cornell Medicine, America’s Loneliness Epidemic: What Is to Be Done?, 2024
3. Costco Careers, Why Costco Careers

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

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