Retirement is one of the biggest commitments in your life. Current statistics indicate that you're likely to be retired for a good portion of your lifetime, as life expectancy has increased.
According to a Gallup poll, the average retirement age in America is 66. In the United States, we live an average of close to 79 years. While that's good news, it does mean those extra years must be provided for in your retirement funding or your lifestyle will suffer as you age. You should plan for at least 12 or more years with all your expenses taken care of and financial planning in place.
Some folks choose to semi-retire instead of quitting work completely. The Bureau of Labor Statistics estimates that 13 million Americans age 65 and older will be in the labor force by 2024. A 2022 survey by the Employee Benefit Research Institute found that 70 percent of workers think they'll be working in retirement.
“There can be income tax and Social Security complications if your income reaches a certain point," says William Campbell, Senior Vice President of David Lerner Associates says. "Keep tabs on your earnings and your outgoing expenses during retirement. Being sensible rather than taking risks during retirement is the key to a secure financial situation in your golden years. Consult your financial advisor to be certain you aren't sabotaging yourself down the road and you have the best advice possible.”
Reasons for semi-retirement
People may work in retirement for several reasons
They need to supplement their income.
Healthcare costs: According to JustCare USA, women who are 65 should have $159,000 set aside for health care when they retire and men in the same age group should have $142,000 available to them. (women live longer than men statistically)
Starting their own business or venture. A Pew Charitable Trust survey discovered that 31 percent of retired women and 40 percent of men work part-time because they want to.
Once you have quit the rat race and have your time back to do as you choose, some folks decide to keep busy. It assists their mental and physical health and also provides extra income during their later years.
Becoming a consultant or working from home is easier than ever before, thanks to the Internet. Finding ways to top up your income as you get older can help keep the wolf from the door.
The money you have saved is essential to your success in retirement. However, relying on savings and investments, along with Social Security benefits, may not be enough depending on your lifestyle and when you retire.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
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Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
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David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC