Working After Retirement? Some Things to Keep in Mind

Do you know your Social Security’s full retirement age?

Most of us probably have our Social Security number down pat. But another important number to know is your full retirement age (or FRA) because it’ll help you understand how your Social Security benefits might be impacted by going back to work. 

If you look at the Social Security Administration’s retirement age chart, you’ll notice that your FRA depends on the year you were born. You may have also noticed that the full retirement age gradually increases by a few months for every birth year. For example, if you were born in 1959, your FRA is 66 and 10 months. And for those born in 1960 or later, it’s 67. 

Take a moment to look up your FRA on the Social Security Administration (SSA) website. It’ll come up again in our discussion below.

Working after retirement could impact your Social Security benefits

If you’ve already started to collect Social Security retirement benefits, the good news is you can continue to receive them even if you decide to go back to work. 

However, the SSA may reduce the amount of your benefits if you haven’t reached your full retirement age and if you earn more than a certain amount.

Let’s look at a few scenarios to help put things into context.

Returning to work after you’ve reached full retirement age

We’ll start with a straightforward example. 

If you’ve reached your full retirement age and started to collect Social Security, going back to work will not impact the amount of your Social Security benefits. In other words, you may keep all your benefits—no matter how much you work or earn.

But what if you haven’t hit your full retirement age?

Returning to work before you’ve reached full retirement age

First, a quick refresher: You may already know that you don’t have to wait until your full retirement age to start collecting some of your Social Security benefits. We say “some” because while you could tap into your Social Security as early as age 62, you won’t be able to collect the full amount of your benefits until you reach your FRA (the SSA only allows you to collect a percentage of it; see “Starting Your Retirement Benefits Early” for more information).

If you’re a retiree who tapped into your Social Security benefits early (i.e. before reaching your FRA) and decided to go back to work, the SSA will reduce your benefits if you make more than a certain amount.

According to the SSA:

• If you’re younger than the full retirement age during all of 2026, they will deduct $1 from your benefits for each $2 you earn above $24,480
• If you reach full retirement age in 2026, they will deduct $1 from your benefits for every $3 you earn above $65,160 until the month you reach your full retirement age.

The SSA provides more detailed examples of how the math works here. 

If you have questions about your specific situation, consult a financial advisor. They can help you understand how your individual benefits might be impacted if you decide to go back to work.  

Pay attention to income taxes

Tax planning is important whether you’re retired or not. But it can be especially important if you decide to go back to work. 

Generally, if you’re receiving Social Security benefits, you have to pay taxes on those benefits depending on your level of income. Visit SSA.gov for details. 

If you receive other forms of taxable income (e.g., investments, retirement account withdrawals, etc.) on top of your Social Security benefits, it’s a good idea to check in with a financial advisor or tax professional to understand your potential tax obligations and avoid any surprises during tax season. 

Understand your health insurance options

For some people, going back to work means you might have access to company benefits again, like a healthcare plan. To be sure, this won’t be the case for everyone because it depends on your work arrangement—for example, some may prefer to be self-employed. 

If your new job offers healthcare, you’ll have to think about whether it makes sense for you to sign up for it or keep the plan you have (whether that’s private insurance or Medicare). The decision will depend, in part, on your healthcare needs and the level of coverage and cost you’re looking for. In short, you’ll want to compare your options. 

Just as with taxes, there can be a lot of rules and details to navigate. While we can’t cover them all in this article, here’s something to think about:

If you’re 65 or older and enrolled in Medicare, you may have the option of signing up for a healthcare plan through your job and keeping your Medicare policy. In some cases, your workplace plan and Medicare could work together to help meet your coverage needs. But before making any decisions, check in with your employer to see how their healthcare plans coordinate with Medicare (also see: “How Medicare works with other insurance”).

Good to know: Medicare rules regarding enrollment, coverage, and coordination of benefits are complex. If you have questions about your specific situation, connect with a health insurance specialist or contact Medicare directly for assistance. 

Parting thoughts

People come out of retirement for different reasons. If you’re thinking about it, ask yourself if this is something you need or want to do. In other words, is it about the money or do you simply want to do more with your days? 

If you’re worried about your retirement security, consider talking to a financial planner. They can help give you a better sense of where you stand financially. (Your retirement accounts may be in better shape than you think.) Sometimes, you may simply need to make adjustments to your spending or withdrawal strategy—without having to go back to work.  

If you’re financially secure but want to do more with your time or make new friends, think about exploring a new hobby or getting involved in your local community. For example, mentoring can be a great way to meet new people, and we bet you have a lot of wisdom to share.

Point is: There are many different ways to fill your time. The answer doesn’t always have to be more work. You’ve worked hard enough to earn your retirement—enjoy it!