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Financial Benefits of Working after Retirement

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Financial Benefits of Working after Retirement

Given retirement can last several decades, many retirees continue working to some degree. Whether by choice or necessity, working after retirement provides you with financial benefits. If you don’t have a financial advisor, this may be a good time to seriously consider getting one.  Here are a few considerations to discuss with your financial advisor.

      • Covering essential expenses. Continuing to work can help you pay for essential expenses such as housing, food, utilities, and health care without using retirement savings. This could enable you to invest some of your savings more aggressively and could allow more “lifestyle” spending.
      • Growing your savings. If your employer offers a 401(k) plan and you’re eligible to participate, you can contribute up to $19,500 plus an additional $6,500 in catch-up contributions (for those age 50 and older) for 2020. If you own a deferred annuity, you can continue saving after you reach 401(k) or IRA annual contribution limits.
      • Maximizing your Social Security benefits. Although you can start collecting benefits at age 62, waiting to collect can pay off. With each year you delay, your overall benefit increases until reaching the maximum amount at age 70. Your advisor can help you time your Social Security benefits as part of an overall cash-flow strategy.

        Social Security benefits are based on your highest 35 years of earnings. Since non-work years don’t factor into the benefit calculation, working longer could increase your Social Security benefit.
      • Providing flexibility with the amount of savings you use every year. Factors such as market volatility, interest rates, inflation, health care and risk tolerance affect the percentage of savings you can sustainably spend during retirement (i.e., your withdrawal rate). Earning income can offset these factors to help your savings last.

A solid retirement income strategy builds your retirement “paycheck” from multiple income sources and doesn’t over-rely on any one source. Your financial advisor can help you with this so that you have confidence about your income for the long term.

Financial adviser Joanne Reilly, CFP ® , CDFA™, APMA ® (Joanne Reilly and Associates) is a Certified Financial Planner with more than 30+ years of successful experience helping her clients to build exciting futures as well as weather unexpected circumstances. In addition to holding the CFP designation, she also holds the CDFA (Certified Divorce Financial Analyst designation) as well as the APMA (Accredited Portfolio Management Advisor) designation.

Joanne, affiliated with Ameriprise and based in Boston, MA, is licensed to practice in multiple states throughout the country (N, S, E, W, as well as the mid-section). A graduate of Smith College, her previous positions included Bank of America (Senior Vice President, Investments and Insurance).

As an After-Fiftier, she loves Boston – but also enjoys travel, time with friends and family, tennis, music and the fine arts. She also makes time for an important priority in her life: The Haven Project. The Haven Project is a growing non-profit organization assisting the needs of homeless young adults on the north shore of Boston. Their mission? EQUIP and EMPOWER the growing population of unaccompanied and at-risk young adults ages 17-24 in the geographical area with the skills and support they need to achieve their life’s purpose.

Visit Joanne on her website at Joanne Reilly and Associates, on Facebook and on Linkedin.

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