How Does Working Longer Affect Your Social Security Benefits?

If you’re like most retirees, you’ll be living off your Social Security payments in your golden years. More than half of older Americans rely on Social Security for at least 50% of their income, and 25% rely on it for 90% of their income, according to the Center on Budget and Policy Priorities (CBPP).

You may also have to work longer hours. Since data collection began in the 1960s, the percentage of American employees between the ages of 62 and 65 has been at its highest. People over 65 now are twice as likely as they were in 1985 to be employed, with roughly 20% continuing to do so (though there was a slight downturn during the pandemic).

As a result of the first set of facts, I believe that maximizing your Social Security payments is critical for your retirement. Many of you may be curious about how working longer affects your benefits and how to make the most of those earning years, given the rising trend of Americans staying in their current jobs for extended durations.

Working Past ‘Retirement’ and Social Security

Delaying Social Security payments for extended periods is common among persons working more hours. Social Security payments might be increased by postponing the date they are paid to you. To put it another way, the larger your benefit, the longer you wait to get your benefits (until age 70, at which point they stop growing).

Increasing your benefits by postponing credits and increasing the earnings figures used in benefit calculations is an additional advantage that may go unnoticed if you work longer. Your monthly Social Security payout is calculated based on your 35 highest-earning years (until age 70). As long as you continue to work and contribute to Social Security, your earnings record will continue to grow. You’ll get more rewards if you earn more money later in life than you did earlier.

Some Pros to Working Longer

You can boost your Social Security payments if you continue working past the more customary retirement age of 65.

• There would also be an increase in any future spousal benefits.
• You may be able to keep up your sharpness. Several studies have shown that those who continue to work have a greater mental acuity level. This research demonstrates that the social networks and mental demands of employment are most likely to blame for this phenomenon.
• If your spouse is covered by your plan and is not eligible for Medicare, you may be able to save money by utilizing your employer’s healthcare instead of Medicare. A Medicare enrollment can be tricky, but Medicare.gov states: “Generally if you have work-based health insurance via the company you are now employed by (or the company your spouse is currently employed by), you do not have to sign up for Medicare while you are still working. There is no need to join up until you quit working (or until you lose your health insurance if that is the case).” You may want to hold out on Part B but join up for Part A because it’s free. Exceptions do exist. A health savings account (HSA) is unavailable if you have any Medicare coverage, including only Part A.

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Bio:
Mark, a lifelong Tulsan graduated from Westminster College, Fulton, Missouri with a Bachelor of Arts in Accounting. Mark served in the United States Army as a Captain in the 486th Civil Affairs BN. Broken Arrow, Oklahoma and retired in 1996. Mark is married to his high school sweetheart Jenny and has four beautiful children. Mark’s passion for his work, which includes over 20 years in the Financial Industry started as an Oklahoma State Bank Examiner. Mark examined banks throughout Oklahoma gaining a vast knowledge and experience on bank investments, small business and family investments. Mark’s experiences include being formally trained by UBS Wealth Management, a global investment firm where he served as a Financial Consultant specializing in Wealth Management for individuals & families. Mark is a licensed Series 24 and 28 General Securities Principal and an Introducing Broker Dealer Financial Operations Principal. Additionally, Mark is a Series 7 and 66 stockbroker and Investment Advisor focusing on market driven investments for individuals, businesses and their families.

Mark specializes in providing financial knowledge, ideas, and solutions for federal employees, individuals, families and businesses. We serve as your advocate, and assist you in the design and implementation of financial strategies while providing the ideas to maximize your security and wealth. Our goal is to give you maximum control of your financial future. We provide the expertise to help you with personal issues such as: practical tax Ideas, risk management, investment solutions, and estate preservation.

Additionally, we’ve counseled hundreds of employees on their transitions from careers in federal government, and private industry to their next life stage, whether that is retirement or a second career. We specialize in devising strategies that roll your TSP, 401(k), pension plan, to a suitable IRA to meet your objectives.

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