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Retirement is something you may have been looking forward to for quite some time. You may have been saving for it since you began working with the hopes of leading a comfortable lifestyle once you are no longer officially bringing in a consistent and well-earned weekly, bi-weekly or monthly paycheck.
However, a few complications, such as people living longer than expected after retirement and the upheaval in the market that took place during the Great Recession, may have put a few wrinkles in your plans.
That has left many people looking for ways to supplement their retirement incomes, perhaps just like you. The good news is that there are plenty of opportunities available for you to do just that. First, however, you must make sure you do not cross specific lines with Uncle Sam, or you could face a few unexpected and unpleasant penalties for doing so.
Here’s what you need to know to avoid making costly missteps while supplementing your retirement income.
According to the Social Security Administration (SSA), income limits mainly apply to Social Security Benefits for people who are not yet at full retirement age. Full retirement age is the age at which you qualify for 100 percent of your social retirement benefits each month. For many years, that age had been 65. However, if you were born after 1943, your retirement age is at 66, which then slowly increases until it hits 67, which then applies to those born after 1960.
If you have not yet reached full retirement in 2023, your annual earning limits are $21,240. Therefore, any earnings above that amount will result in a decrease in your monthly retirement benefits.
For those who will reach full retirement age in 2023, limits on earnings in the months leading to that date are $56,250. For this purpose, the SSA only considers earnings for the one month before your full retirement age.
This includes income from the following:
It does not include income from the following, though:
Once you reach full retirement age, you have no limits on your earned income and will continue to receive your full benefits.
Generating income during retirement is more manageable than you might believe. Most retirees do not need to rely on a full-time salary. Instead, some are only looking to supplement their incomes, make their funds last longer, or afford a few desirable luxuries during their golden years. That means you do not need to embark on a new career to make ends meet, though you could enjoy a nice part-time income or turn a hobby into a little extra cash. These are a few ideas you might want to consider for retirement income.
There are nearly endless opportunities to earn money during retirement to supplement your income or fund your dreams.
Oddly enough, the benefits of working in retirement are far more than financial. While some people initially decide to work during retirement for economic reasons, many keep working throughout retirement for deeply personal reasons. These are just a few benefits you can experience by working during retirement.
However, the bottom line for some people is that they enjoy working and wish to continue doing so.
Of course, there are financial benefits to consider for working during retirement. Many of these are too big to be discounted or ignored. That is especially the case for retirees concerned that their nest eggs are not sufficient to meet their needs and expectations. That includes reasons like the following:
Retirement does not mean you have to sit at home and take up knitting, not that there’s anything wrong with that. Many of today’s retirees are more energetic and active than ever before. Sometimes, that requires a little creative financial planning before retirement, and at other times, it might mean you want to continue earning well into your retirement. But, it is your retirement, so do what you please.