The Ugly Truth About Working Longer And Social Security Benefits?

You are probably aware that you will receive larger payouts if you continue working and delay filing. There is, however, more to it.

If you’re like most seniors, your retirement income will be dominated by Social Security payouts. Approximately fifty percent of older Americans rely on Social Security for at least fifty percent of their income, and twenty-five percent rely on it for ninety percent.

You may also be working more hours. The employment rate of Americans aged 62 to 65 has been the highest since data collection began in the 1960s. And individuals over 65 are around twice as likely to be employed as they were in 1985, with approximately 20% still in the workforce (despite a slight decline during the pandemic).

The first set of facts emphasizes the significance of Social Security benefits to your retirement lifestyle and the necessity to maximize these benefits. The number of Americans working longer suggests that many of you may be curious about how working longer affects your benefits and how you might maximize your earning years.

Social Security and Continuing to Work After “Retirement”

Some individuals who work longer wait to obtain their Social Security payments to allow them to increase. You’re undoubtedly aware that you may enhance your Social Security benefits by postponing when you begin collecting payments. Basically, the longer you wait to get benefits, the more you will get (until age 70, at which point they stop growing). You can utilize the Social Security Administration’s (SSA) calculator to see how much you could earn by delaying retirement.

There is an additional, unheralded advantage to working longer: You might boost your benefits by postponing the accrual of credits and increasing the earnings utilized to compute those benefits. Social Security calculates your monthly payout using your top 35 years of earnings (until age 70). Your earnings record will be updated as long as you continue to work and contribute to Social Security. If your earnings in subsequent years exceed those in earlier years, your benefits will grow proportionally.

Some Advantages of Working Longer

Working beyond the usual retirement age of 65 may increase benefits beyond Social Security. Future spouse benefits would also grow.

You may become more perceptive. Several studies indicate that those who continue to work exhibit greater mental clarity. These studies demonstrate that it is most likely linked to social networks and mental problems in the workplace.

If your spouse is covered by your employer’s plan and is ineligible for Medicare, you may save money by continuing with your employer’s health insurance instead of Medicare. states that if you have employment-based health insurance via your (or your spouse’s) present employer, you (or your spouse) are not required to enroll in Medicare. You can delay enrollment until you (or your spouse) become unemployed or lose health insurance (whichever comes first). There are exceptions, and you may choose to defer Part B but enroll in Part A because it is free. Be careful: You cannot contribute to a health savings account if you enroll in Medicare or Part A.

A Few Additional Warnings

Required minimum distribution (RMD) difficulties may arise if you have traditional retirement accounts. Due to SECURE 2.0, you are not required to withdraw RMDs until you are 73, and that age will increase to 75 by January 1, 2033. However, if you are still working, your RMD earnings might put you in a higher tax bracket.

Social Security payments must be taxed if your total income exceeds $25,000 if you file as a single individual or $32,000 as a married couple. Your yearly income (including any RMD income) will determine the portion of your taxable Social Security payments.

Medicare Parts B and D can cost more for those with higher incomes. As previously noted, you might avoid this issue by sticking with your employer’s healthcare plan.

Another consideration is: You can “unretire” after enrolling in Social Security, subject to certain restrictions. After accepting benefits, if you change your mind within 12 months, you can seek a withdrawal of benefits and receive them later when you qualify for a bigger payout. However, there is a catch: you must repay all the benefits you and your family got. If you have been receiving benefits for more than one year, you must wait until your full retirement age to request a suspension.

Should You Work Extra Hours?

Consider not only your financial circumstances while making this decision but also the following:

Health: Consider your and your spouse’s health and your healthcare requirements. As previously noted, working later in life might be advantageous for your mental health, but what about your physical health? How is your partner’s health? Do they require additional assistance around the house? Do you need to continue working to afford medical care? Remember that time spent working is time away from your family.

Longevity: Are you descended from a long-lived family? Working longer and deferring Social Security benefits can increase your retirement income, which is especially beneficial for people with lengthy life expectancies. You should establish a strategy to make your money endure as long as you do.

Your job: Do you enjoy it? Does it make you feel younger?

Of course, consider your compensation as well. Ageism in the workplace can be problematic, although it may not affect everyone, and some employers may favor the knowledge and expertise of elder personnel. In reality, the median wages of American employees aged 62 to 65 are higher than those of younger workers.


The decision to work longer is based on the individual, but health and income are probably the two most important drivers on whether you elect to work longer or work part-time after you retire.

For more retirement news: