Although many plan and dream to fully retire at a certain age, more have found that working through retirement can improve quality of life, while also supplementing retirement income and benefits. A recent study, published by the National Institute of Health, found older age at retirement is associated with decreased risk of dementia!

Working through retirement, if planned properly, doesn’t require a stressful position. For instance, working at a local music or sports venue, can not only make you some extra money, but save you from buying those season tickets! Further, working some through retirement can provide you purpose in supporting the organizations and causes that have mattered most to you during your lifetime. Dependent upon your exact needs and desires, certain positions can even provide supplemental health and wellness benefits that may not fit your budget otherwise.

Social Security

Social Security was first established with the passage of the Social Security Act of 1935. It was passed, initially, to help those struggling during The Great Depression, however, in time it evolved into the complex program that now assists retirees across the country. 

The entire program is based on payment into the system through your working years, and based on your highest 35 years of earnings, benefits are calculated and vary based on how much you earn and when you choose to start benefits. There are various ages you can begin collecting retirement, but as a rule of thumb it is best to wait until at least full retirement age, or even age 70 when benefits max out. Regardless of Social Security retirement age selected, enrolling in Medicare at age 65 is a must to maximize benefits. Calculating the best age to begin collecting retirement is a personal and financial decision that is best made with a qualified financial planning associate. 

It mustn't be forgotten that full Social Security payments are not automatic regardless of earnings, so any earnings in retirement should be closely monitored. In fact, in 2022 the annual earnings limit is $19,560 for an individual before benefits are decreased. Social Security will withhold $1 in benefits for every $2 of earnings in excess of the lower exempt amount ($19,560 in 2022). Further, they will withhold $1 in benefits for every $3 of earnings in excess of the higher exempt amount ($51,960 in 2022).

Because of the complexities of electing your Social Security Retirement age, in addition to reduced benefits based on annual earnings it is highly recommended you discuss your full financial situation with a financial professional at KCA Wealth Management before making any decisions. Unfortunately, many retirees find themselves making regrettable decisions regarding their benefits that can leave a lasting impact on their financial situation. Although supplemental income in retirement is great for many, it is best to plan out the impacts of doing so, before any unforeseen impacts are felt.

Employer Benefits

Although some of us can leverage prior employers retirement benefits, such as military healthcare for veterans, many of us are left in retirement without a prior employer’s supplemental benefits in retirement. Because of this many retirees can benefit from an employer in retirement providing them healthcare, among other benefits, throughout their retirement. 

This is far from peculiar, in fact, 40% of retirees over 65 had retired, but decided to rejoin the workforce thereafter. However, it is important to properly do so. Medicare covers retirees over the age of 65, but has a multitude of coverages. Few pay premiums for Medicare Part A, but most do pay for Medicare Part B coverage. Part B covers services such as:

• Clinical research  
• Ambulance services
• Durable medical equipment (DME)
• Mental health
• Inpatient
• Outpatient
• Partial hospitalization
• Limited outpatient prescription drugs

Thus, it is imperative any retiree has coverage, otherwise one could face mounting medical bills. However, in 2021 Part B coverage costs a monthly fee of $148.50. This can be avoided by electing employer health insurance, however many rules apply, and additional fees/penalties can be assessed if not followed properly. Because of this it is imperative any retiree should sit with a financial planning expert when planning their coverages. In some cases a combination of the two plans is best, while waiving one of the coverages is best in other situations.

Health and Wellness Benefits

Although finances are top of mind for any retiree, it is also imperative one thinks of the overarching impact of their health and wellness. If you have saved, invested and allocated funds well, often a healthy financial retirement comes with flexibility and freedom. However, staying in good health is imperative to a long healthy life; it cannot be discounted the benefits of staying active. Even if your financial picture is rich, retirees should at minimum consider volunteering and staying active in their community.

According to a recent published study, older age at retirement is associated with decreased risk of dementia! This was published with a high-confidence interval, with no question of its significance. Further, regardless of age it is important to stay physically active. Although many of us may try committing to daily exercise, a job in retirement can keep us accountable to getting out of the house and physically active regardless of pay.

Working in retirement also leads to higher levels of overall wellness. Recent studies have proven, on average, retirees without work reported higher levels of depression, lower life satisfaction, and more likely to partake in hazardous drinking and smoking habits. Although a stressful career is far from recommended, purpose and accountability are important regardless of age for the health of any individual. 

Lastly, it cannot be discounted that the workplace brings us closer to individuals and builds social relationships. Researchers have found that feelings of social isolation are linked to mental and physical health problems. Although many of us dream for our days of retirement, a vision that includes purpose should be included, regardless of financial situation.

At KCA Wealth Management we are there for you throughout your entire life. Our mission is to provide our clients with the highest level of service while helping them reach their financial destination. We will help you develop, implement, and monitor a strategy that’s designed to address your individual situation. We look forward to meeting and assisting you in your financial future.