Wednesday, April 25, 2012

Part-Time Work for Your Retirement Years

When you're retiring, there are financial and personal ramifications you need to consider. Many people still view retirement as a full-time pursuit, but that has changed over the last decade. Retirees may work part-time to keep themselves busy or for financial or healthcare insurance reasons. Before you settle into full retirement or take a part-time job after you retire, evaluate your personal circumstances to avoid a costly mistake.

Finances

You may need part-time work to cover gaps in your retirement plan. Look at your business account or personal accounts to determine if you have enough money to retire fully. How much you'll need depends on your living expenses, medical expenses, potential emergency costs and your life expectancy.

Since it's not possible to determine how long you'll live, assume you'll live to a very old age and budget based on that estimation to avoid shortfalls. Don't forget potential future living expenses that may come with age, such as nursing home care. If part of your money is related to a business account, look at the future of the business when determining its value.

Benefits you receive, such as Social Security and Medicare, may affected by income you receive. Check the rules for any programs you're receiving retirement money from before taking part-time work to determine how much you can earn before you lose money. Income limits for Social Security, for example, may change due to inflation adjustment, so keep up on the latest rules.

Personal Situation

Some retirees work to avoid boredom and lack of activity. If you have a solid routine planned, you may not need a job to keep you active. If you don't, you may need to consider a part-time job to avoid becoming unfocused and listless. If earning extra money will negatively affect your benefits, you can take some unpaid volunteer work instead.

If you decide to get a job, you may face some obstacles because of your age. While age discrimination is against federal law, you might not have a recent enough education to compete with younger applicants, especially in the technological field.

Consider taking some classes if you're concerned about changes in the field you want to work in after you retire. Even if you were an expert at your job, employers do consider recent and continuing education when weighing applicants.

Try Experimenting

You don't need to stick to the same field if you want to try something different. Don't get frustrated or discouraged when looking for work. You may to have to apply to several employers before you find a job. If the job you get doesn't work out or isn't what you expected, don't be afraid to look for something else.

If you've ever wanted to run your own business, retirement may be the time to do so if you can afford it. While you shouldn't risk your retirement egg on a business venture, you may be able to start a small business if the start-up costs are small and the financial risk to you low. Before pouring your money into a business account, make sure your plan is realistic.

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