At first glance, you may not think that work and retirement mix. After all, retirement is all about leaving the working world. How can you enjoy your newfound freedom and lifestyle if you’re still working?
 
Working doesn’t have to mean giving up your freedom, though. You could work part time or seasonally. You could work as a coach, consultant or trainer and manage your own schedule. You could even freelance or drive for a ride-sharing company.
 
No matter which route you take, there are serious benefits to working in retirement. Obviously you get supplemental income, which could help you maintain your retirement assets and enjoy greater financial stability. Work could also provide socialization opportunities and help you meet new friends.
 
There are also a few considerations that you shouldn’t ignore. Are you healthy enough to work in retirement? What kind of schedule would allow you to still enjoy your retirement? And perhaps most important, how will the extra income affect your Social Security benefits?
 
Social Security is an important resource for retirees. In fact, nearly 90 percent of all Americans age 65 and older rely on Social Security for income.1 If you’re like most, Social Security will play an important role in your financial picture.

Does work impact your Social Security benefits? It depends on a number of factors, including your earnings and your age. Below are a few important guidelines to keep in mind as you plan your retirement strategy:

Before Full Retirement Age (FRA)
 
The earliest you can file for Social Security is age 62. You can file at this age even if you are still working. Regardless of whether you’re working, however, filing before your FRA could lead to a big reduction in your benefits, perhaps as much as 35 percent.2 Despite the potential reduction, many people choose to file for benefits as soon as they’re eligible.
 
The benefit reduction could be compounded if you file early and choose to work. Before your FRA, you can earn up to $17,040 in a year without seeing a reduction in your benefits. After you cross that threshold, however, your benefit is reduced by $1 for every $2 you earn. If you plan on continuing to work, think carefully about whether it makes sense to file for Social Security.3

Year of Your FRA
 
Most people’s FRA lands at some point between their 66th and 67th birthdays. The actual month depends on your date of birth. You don’t technically reach your FRA until that month arrives.4
 
Once you reach the year of your FRA, Social Security makes an adjustment to the work reduction. In that year, you can earn as much as $45,360 without seeing a reduction. Keep in mind that those are your maximum earnings up to the month in which you reach your FRA. After you cross the threshold, your benefit is reduced by $1 for every $3 you earn.

 After Your FRA 
 
In the month you reach your FRA, you can start working with no benefit reduction and no earnings limit. You can earn as much as you want and still receive your full Social Security benefit. At this time, Social Security also recalculates your benefit amount and excludes any months in which your benefit was previously reduced because of earnings penalties.
 
Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 

1https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
2https://www.ssa.gov/planners/retire/agereduction.html
3https://www.ssa.gov/planners/retire/whileworking.html
4https://www.ssa.gov/planners/retire/1943.html
 
Advisory Services Offered Through Change Path LLC, a Registered Investment Advisor. Heritage Financial North and Change Path LLC are not affiliated.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
17846 – 2018/7/30

Are you considering moving into a retirement community? That could be a smart move. Retirement communities are popular because they usually offer a wide range of activities, amenities and socialization opportunities. They also offer support for each phase of retirement, from independent living to assisted living to skilled nursing care.
 
You may find a retirement community helpful because it gives you the chance to enjoy your independence while also having support and medical providers nearby. You also may make a whole network of new friends, as all of your neighbors will be like-minded retirees. In fact, regular socialization with others could reduce your stress level and your risk of cognitive disorders like Alzheimer’s.
 
Before you sign the contract, though, it’s important to do your due diligence and ask tough questions. Every community will put its best face forward during the sales process. Not all communities are the same, however. Below are a few factors to think about as you consider your retirement community options:

Community Finances
 
Your retirement community is meant to be your final home. You may transition over time from independent living to assisted living or even skilled nursing care. However, the idea is that you’ll never have to move again after you move into the community. You could be there for several decades.
 
The only way to get the full benefit of the community’s services, though, is for the community to last for the duration of your retirement. If the community fails because of financial issues, you may not get a return of your deposit or other funds.
 
Don’t be afraid to ask about the community’s finances before you move in. The occupancy rate is an especially important point. If the community has a high level of vacancies, that could be a red flag. Ask why the vacancies exist and what’s being done to correct the issue. You may even ask to see the community’s balance sheet. Also, be sure to ask what happens to your deposit and payments if the community ever becomes financially insolvent.

Base Services and Extras
 
As you tour a retirement community, you will likely see flashy marketing materials that highlight fun activities and luxurious amenities. However, those items aren’t always included in your initial deposit and monthly payments. Many communities offer premium services and amenities for an extra cost.
 
For example, group outings could cost extra. While the community may have an association with a local golf or tennis club, you may have to pay membership dues to join. Also, it’s possible that your costs may change if you transition to assisted living or skilled nursing care. Ask plenty of questions to see how the costs will add up now and in the future.

Long-Term Care Insurance
 
If you’re in the early stages of retirement, you may not be thinking about long-term care. However, long-term care is an issue that many retirees will face at some point. It’s extended assistance with basic daily activities such as mobility, bathing and eating. Most communities offer some level of long-term care support, usually through an assisted living community.
 
If you already own long-term care insurance, check with your insurer to make sure it covers the community and its services. If you don’t have insurance, now may be the time to consider it. Your insurance policy could help cover some of your community payments should you ever need assisted living care or skilled nursing care. Your financial professional can help you determine which long-term care policy is right for you.
 
Ready to develop your retirement strategy? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
Advisory Services Offered Through Change Path LLC, a Registered Investment Advisor. Heritage Financial North and Change Path LLC are not affiliated.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
17848 – 2018/7/30