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Retirement Income: The Transition Into Retirement
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Phased retirement
Some employers
have begun to offer
phased retirement
programs. These
programs allow you
to receive all or part
of your pension
benefit once you've
reached
retirement age,
while you continue
to work on a part-time
basis for the
same employer. | |
Do You Plan to Work in Retirement?
Many employees nearing retirement plan to work for at least some
period of time during their retirement years. The obvious advantage of working during
retirement is that you'll be earning money and relying less on your retirement
savings — leaving more to potentially grow for the future and helping your savings
last longer.
But there are also non-economic reasons for working during retirement. Many retirees
work for personal fulfillment — to stay mentally and physically active, to enjoy
the social benefits of working, or to try their hand at something new. The reasons
are as varied as the retirees themselves.
If you're thinking of working during a portion of your retirement, you'll
want to consider carefully how it might affect your overall retirement income plan.
For example:
- If you continue to work, will you have access to affordable health care (more and
more employers are offering this important benefit to part-time employees)?
- Will working in retirement allow you to delay receiving Social Security retirement
benefits? If so, your annual benefit may be
higher than if you don't delay.
- If you'll be receiving Social Security benefits while working, how will your
work income affect the amount of Social Security benefits that you receive? Additional
earnings can increase benefits in future years. However, for years before you reach
full retirement age, $1 in benefits will generally be withheld for every $2 you
earn over the annual earnings limit ($18,960 in 2021). Special rules apply in the
year that you reach full retirement age.
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IMPORTANT DISCLOSURES
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2021. |
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