Unretirement: How Returning to Work Affects Social Security Benefits

Unretirement: How Returning to Work Affects Your Social Security Benefits

The Rise of Unretirement

An increasing number of retirees are choosing to return to work, a phenomenon known as “unretirement.” Around 20% of retirees are re-entering the workforce, whether part-time or full-time. This trend is driven by a combination of factors, including the desire for emotional fulfillment, mental stimulation, and the need to supplement income. As life expectancies continue to rise—often reaching 95 years or more—many retirees find that working provides both financial and personal benefits.

Social Security and Returning to Work

For retirees considering going back to work, it’s essential to understand how working will impact Social Security benefits. Those who claimed benefits early face unique challenges and opportunities:

Withdrawing Early Benefits: Early claimants have the option to withdraw their Social Security benefits by repaying the amount received. This allows their benefits to grow for future payouts.
Income Limits for Current Beneficiaries: Retirees who are already receiving Social Security must stay mindful of income thresholds. If earnings exceed $223,400, benefits are reduced by $1 for every $2 earned.

Planning for Unretirement

As unretirement becomes more common, retirees must carefully plan their return to work to avoid financial pitfalls. The complexities of balancing Social Security benefits, income thresholds, and long-term financial goals highlight the need for guidance from a Financial Advisor.

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Michaela Dowdy

Financial Advisor, Wiser Wealth Management

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