The Pros and Cons of Working Past 65

by Emily Guy Birken · 25 comments

working after retirement

My husband and I met with our financial advisor last week to tweak some of our retirement savings. As an aside, our advisor mentioned it was unlikely that our generation — all three of us are currently in our mid-thirties — will retire at 65. Instead, he believed we will probably work until we’re 70.

Aside from the disappointing idea that we’re still in for another 30 years of working, the prospect of pushing retirement off a few years is not necessarily a negative one. Here are some of the reasons why a later retirement could be beneficial — or a major problem.


It used to be that reaching 65 meant that you had become an old-timer. But now that a 65-year-old could still easily see another 25-30 years of good health, it makes sense to continue working.

Not only will it help to stave off the boredom that many able-bodied retirees find themselves fighting after leaving their career at the traditional age, but it also gives you more time to save for retirement while you are (generally) at the top of your pay scale.

In addition to the personal benefits of retiring later, your employer can also reap many rewards by keeping you around for a few more years. It can be very difficult for a company to replace the depth of knowledge and expertise that an older employee has, simply through the benefit of working in the same place for decades.

working past 65Finally, there are the societal benefits to having an older retirement age. According to economist Diane Lim Rogers, having retirement moved from 65 to 67 or 70 would significantly lower both Medicare and Social Security spending, meaning that it would be easier for government to balance the budget for those entitlement programs.


Working past 65 is not all a bed of roses, however. For workers who are either not passionate about their work, or who are working in a job that is physically demanding or extremely stressful, the idea of keeping that job for longer is not a pleasant one. In some cases, working past the mid-60s may not even be entirely safe.

Older workers are also making it more difficult for young employees to get their feet in the door. In 2010, senior citizens outnumbered teenagers in the workforce for the first time in sixty years, according to Bloomberg News. And with the last of the huge babyboomer population becoming 65 in the year 2030, this trend is likely to continue for some time.

The lack of opportunities for young workers has negative consequences on all levels, from the personal to the professional to the national.

Finally, there is the sad fact that many individuals are delaying retirement because they cannot afford to do otherwise. There is a national problem with seniors living in poverty or near-poverty conditions. While there is certainly a great deal that this generation and future generations of seniors can offer to the workplace and the country, the overwhelming financial necessity of working past the traditional retirement age is not good for anyone.

Luckily, working past 65 can vastly improve one’s financial standing. This is true even for those who only work part time. Aside from the increase in take-home pay, one reason is that Social Security benefits can increase dramatically for anyone who elects to delay receiving the benefits. On the other hand, having earned income while you get Social Security checks can complicate the calculations used to calculate your benefits. Here’s what you need to know about Social Security’s rules and limits if you continue drawing a paycheck after applying for benefits.

Senior employee

Timing Matters

There are many great reasons to wait for Social Security’s full retirement age of 66 (or 67 now for some born later), and the effects of part-time income on your benefits is one of them. If you begin drawing benefits as soon as you’re eligible (at age 62), not only will you be receiving reduced benefits based on how many months you are from full retirement age, but you’ll also see a reduction in benefits based on your part-time income.

In particular, those retirees working part-time who are younger than 66 will see $1 deducted from their benefits for each $2 they earn over the current limit of $15,120. (That income limit is the case for 2013, and the amount is re-adjusted each year for inflation).

What’s more, Social Security does not simply reduce your monthly benefits throughout the year if you’re working part-time. Instead, your benefits will be completely withheld until you’ve reached the full benefit reduction amount. What this means is that you could go half the year with no Social Security benefits, but you’ll receive your full benefits for the second half of the year.

If, however, you begin drawing benefits during the same year that you reach full retirement age, the part-time income limit is higher ($50,520 for 2021) and the amount your benefits are reduced is lower – $1 for every $3 you earn above that amount. In addition, you’ll only see a reduction in benefits until you reach your full retirement age, at which point you can keep all of your benefits, no matter how much you’re earning.

Return of Withheld Benefits

On the plus side, however, the benefits that were withheld while you were working part-time before age 66 aren’t gone forever. According to the Social Security Administration, “If some of your retirement benefits are withheld because of your earnings, your benefits will be increased starting at your full retirement age to take into account those months in which benefits were withheld.”

So it’s important to remember that if you have to take benefits early while still bringing in a paycheck, you can still see your full benefits when you’re ready to more fully retire at age 66 or older.

Tax Considerations

Of course, working during retirement can also cause some added tax complications. Social Security benefits are taxable if you and your spouse have a combined income greater than $32,000. Taxpayers filing jointly who are eligible for Social Security will have to pay taxes on 50% of their benefits if they earn between $32,000 and $44,000 per year. Above $44,000 per year in earnings, and the couple will have to pay taxes on up to 85% of their Social Security benefits.

The Bottom Line

Working part-time in retirement can be a great way to stretch out your retirement savings and keep a hand in your career,k but it’s essential to figure out how continuing to work can affect your benefits when doing your retirement planning.

It’s likely that my generation will have to work longer than previous generations. That’s why the best thing we can all do is to diligently save for retirement. That will help to make the option of working past 65 a choice, rather than a sentence.

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{ read the comments below or add one }

  • susan clark says:

    Social Security and Medicare ARE NOT ENTITLEMENTS! They are a collective, mandated federal insurance program that employees and employers pay into for decades in order to provide a safety net for retirees during retirement years. This being the case, these funds should NEVER be raided to balance the federal budget or used for any other line item. They should remain singular in their original intent in order to remain solvent. If Reagan had never raided these funds in order to cover for the wealth tax reduction for corporations, there would not be any chatter, worry, or publications about running out of funding, because with the time value of money equation, these accounts should be currently be flush, within the quintillions of U.S. dollars, even with regular disbursals.

    Susan Clark

  • Jocelyn Gallant says:

    I cannot afford to retire because Social Security is not enough and I live alone and I do not have long term insurance that is the problem. Social Security does not go up it only goes up to 1% or 2% years it does not support us financially. It is outdated system.

  • Stephanie says:

    I have watched my parents “retire” My mom is self employed and sells things at craft markets. She says that even though she does not make enough money to be a millionaire, she loves being in the public and loves meeting the people that are vendors. For her, it has opened a whole new world of friendships. She is 66 and my dad is 70.
    Another option for someone who is retired, find places to volunteer. As a teacher, I can tell you that small children “love” to have people work one to one with them and love story time. I volunteered one time at a daycare and just read stories and the children loved it. The workers there told me how much the kids looked forward to me coming because they felt special when they had someone pay them attention. As a teacher in high school, kids can still tell me about the people who came to work with them. Doing that makes more difference than you think.
    Our church is always looking for people to help with meals on wheels.
    Also, check to see if any of the local colleges offer coursework that you could take. Arkansas offers free classes to people (can’t remember the age) to whatever class you want to take. I remember taking classes with people who were older and they were just there b/c they wanted to learn things. Also, had older people who took water aerobics classes because they wanted to stay healthy. My husband’s grandmother took water aerobics at a local college and also loved it.
    I guess the old adage you are as young as you feel is true.
    Retirement does not mean giving up. To me, it is just an opportunity to go do things that you never thought you could.

  • Sunshine Stamps says:

    It used to be that reaching 65 meant that you had become an old-timer.

  • Paul Spiriti says:

    Medicare and Social Security are NOT entitlement programs!! The money to fund those programs was taken from our paychecks, without our choice, and is owed to us!

  • Red says:

    I hope i can retire early as well. Im doing my best to contribute to my 401k. Started about 8 years ago. Early like 55. Then used my 401k for couple of years then collect SS.

    I just hope the stock market doesn’t fail me.

    • jim says:

      Do NOT count on the stock market not failing you. I lost my ass in the last crash – seriously, lost my ass. Over 50% of what I had “invested” for the past 20 years – up and gone – and that was with “advisors”. Best of luck.

      • Red says:

        Copy that… Jim

        I don’t buy single stocks anymore. I got killed and sorta learn to just do Boring retirement investing like life cycle funds, so far its turned out ok.

        I am very cautious now since i dont have much time to my target early retirement.

  • Roger says:

    It’s a simple, yet devastatingly complex, situation. Just save and invest enough while you’re working to cover your expenses after you quit (full-time) work. The only problem is that the unknowns are HUGE — remaining life after retirement, expenses, inflation, investment returns, health, taxation, etc.

    But historically, neither the human race nor any other species has enjoyed a long life expectancy after no longer being a productive member of society. Now, we humans have both the means to store wealth and the enhanced productivity to build up wealth for a time of not working. If only we were doing it better!

    And while humans can certainly care for their elderly beyond their productive years, post-WWII mobility has made that impractical for many older persons. Having funds for your own support in your older years requires carefully balancing the number of years working and the number not working.

  • jim says:

    For those readers who have already retired, would you please give us “working stiffs” some information on what we should be doing before retirement? e.g. what did you do that you’re really glad you did before you retired? what did you do or fail to do that you regret? how much $ do you really need to retire? how did you pay off your mortgage and get debt-free? Thanks much.

    • Lifeisdynamic says:

      Jim, I am 58years old and would love to retire from my life long career. I am bored with it and well and truly over the nonsense of change for change sake sometimes (always looking for cheaper ways of doing things but not necessarily workable changes).

      Anyway, I have a plan to semi-retire when 60yo. I say semi-retire as I have a plan to keep earning (likely within my old career plus using other skills I have as an extra income earner). The idea is to actually treat the 60yo mark as if I was retiring permanently thereby have a psychological effect ergo: I don’t have to work to pay the bills with no personal life financial freedom. If the worst happens and my job disappears, I do not have the angst of how I am going to pay mortgage, car and so on. I still have my own roof to shelter under and a vehicle which is well maintained to ensure I can travel to work if I need to, etc.
      As for the rest: eliminate unnecessary expense – memberships, luxury items not necessary to survive or earn from. All loans paid before retirement – set a month and year you would like to retire and organise your financial goals around that date (you may need to change the date for another year or two later in your planning). I live in Australia and so I chose the age of 60yo to work from when planning (gives me less than 2 years now). The reason I chose this date is because there are certain financial and Government benefits available to me at that age and will assist me to transition into semi retirement or if necessary (hopefully not) complete retirement. You may have different benefits available at a different age which may be available (check it out – ask, websites). These benefits/allowances make a big difference in how you will manage financially in retirement or semi retirement.
      When this decision made, start axing all unnecessary expenditure – be as frugal as possible without making your working life a misery. On that note, knowing you are meeting your goals makes being especially frugal that much easier psychologically – you are getting ready to retire asap – there is light ahead! All spare savings must go into paying down loans – most notably your home. If you are not particularly in love with your home, location or it is too large for you, seriously plan on selling the property and downsizing in a cheaper area or an area you would rather live (you will likely not need to be so close to where you work anyway but ensure the place you decide to move to has all the services, eg banks, doctors, supermarket, etc you need near to where you live). Hopefully if you are clever, you will make money from the sale of you home over and above the purchase of another.
      Which brings me to managing money to earn money – INVESTMENT.

      Conservative investment will keep your principle safe while earning you a little extra and assumes you are hoping to retire sometime in next 5 years or so. Understand how conservative investments such as Term Deposits and CD’s work (read online). Invest in Government Bondswhen the cash rate is low and so on (bank TD’s and Gov’t bonds are guaranteeded up to a certain figure in Aust). Rollover your investments where it is prudent and beneficial to do so and meets your retirement plan. Of course like with any dividend or interest earning investment, the more you invest, the more you earn.

      Jim it sounds to me that you are unsure about how to go about preparing for retirement. The first thing to do is to decide what you want to do in retirement – what lifestyle – fishing at the local waterhole, caravan traveler or jet setter? This will the starting point for calculating how much you need and how long you will need to work. It is often suggested that people live 20years post retirement from the age of 65yo and this time frame is used to calculate the number of years you need to ensure you have an income into the future. You will need to research the figures regarding the life expectancy for males in the US to help you ascertain how much you will need post retirement.

      Have a plan B for earning some money while retired – home maintenance, for example; learning how to invest in shares and do some day trading and so on. The US and the World will not always be in an volatile situation so plan as if things will settle so as you have a plan which is workable and can be adjusted over time if it needs to be.
      Must stop now.

      Good luck,

    • EdG says:

      What should you be doing? 401k, mutual funds, dollar cost averaging, pay down debt, live and invest conservatively. Pretty much what everyone says is right on.
      Things glad I did: pretty much the above list, bought out of favor houses needing work in nice neighborhoods to live in
      How much $s to retire? Really depends too much on your location, lifestyle and retirement age to say.
      How to pay off mortgage and debt? Go to community college for your first 2 years of college, buy 3-4 year old used cars, buy a house that needs a little work, live conservatively.
      And take time to have fun, life is too short and you never know what the future will be.

  • Guy Ivie says:

    PLEASE stop calling Social Security and Medicare “entitlement programs.” My pay stub shows a deduction for both of them. They are programs that I pay into, just the same as I pay into my IRA. No one calls an IRA an “entitlement program”!

    • John Ben Ricks Sr says:

      Medicare is not free. I am turning 65 and Medicare Part B is going to cost me $265 a month and according to all I’ve read, including input from my current benefits personnel, I must pay and have part B. That’s $3000 a year I will not have. Medicare is causing me to have to work forever. I tried saving and was wiped out twice; once to take care of my mother, and again to take care of my sister. If I had not saved they would have been in a bad way. Now I am.

  • Bill says:

    It’s easy to talk about working past retirement age, but I’m pushing 61 and wondering whether I’ll have a job to retire from.

    • Kembek says:

      I retired at 57 and have yet to be bored.

      • Jean says:

        Do you mind sharing with us what what you have done since retirement to keep yourself busy? It would be good to know so I can suggest to those I know among family and friends that are approaching retirement.


        • Paul Z says:

          I am 65. I retired from being a Self employed Psychotherapist in San Diego at age 58. Sold my California property for 4 others in the Park City, Utah area. Yes, I made more than most occupations but Retirement for the Self Employed is essentially investments in the stock market. I have been lucky (Apple) and unlucky (Washington Mutual) I rent out my house and live very easily in Europe on $85 average a day. Do yourself a favor and add up all your expenses because most you won’t have if you Travel eg utilities, cable TV , phone bill etc. I have been over here since April and admittedly mix it up with nice hotels in combination with Hostels. Embrace Minimalism. Do yourself a favor and Google sites like and I lived 5 weeks in Greece, a month in Turkey and 5 weeks in Spain mainly because I took 35 days walking the 500 mile Camino Santiago de la Compostela: An amazing fascinating way to socialize and exercise. I own no car and all the hassles that comes with that lifestyle. Invest in Lonely Planet or Rick Steve’s Guide books. Get an IPad . Install Skype . Wifi is accessible worldwide and it’s free. Didn’t you work all your Life to “See The World”? You won’t miss Fox and CNN at all. Invest in a pair of walking shoes and LIVE really Live. Oh and yes look forward to Holidays with family maybe in Puerto Escondido Mexico this year. Go For it Buddy!!!

          Paul Z
          Tomar, Portugal
          Ps Let me repeat something. I live well and extremely interesting on 85 bux a day. that’s about $2500 a month plus airfare.

  • Greg says:

    I hear about so many people that retire and within 4 or 5 years they die. I don’t want to retire then die! I want to retire as early as possible while I still have good health. I think the best thing that can be done is to rework retirement. For example: You are retired until you are 60 then you go to work… 🙂

  • Jim says:

    The age for SS is now 67 or moving towards it.

    I think it would be great to take 5 years off sometime in your 50s and go do some bucket list things and then go back to work knowing that you have already done some of the things in life you wanted. I was ontrack to retire early 60s until the bottom fell out of the real estate market.

  • Linda says:

    I retired at age 53 by downsizing my expenses, selling a house in Massachusetts and using half the cash to buy a nice house with garage in a small post industrial town 20 miles from Pittsburgh. I have done some part time work since then and am now on Social Security (at age 65). I do not go to movies (I watch them on Hulu) and I grow many of my own vegetables. I do not shop at expensive stores.

    The biggest problem why people can’t retire early or on time is that they are very attached to an expensive life style that they’ve been brainwashed into believing they must have. They are robo-consumers, programmed to consume and consume and consume.

    Until they change their values and detox from consumerism they’d best get used to working, working and more working.

    Everyone should begin their retirement planning by determining how they can get rid of debt before retiring and how to live without a mortgage afterwards. Just these two changes will drasticly reduce the amount of money you need.

    The truth is by the time you hit your 50s you often need to consider another occupation than the one you have. You are bored perhaps and or a younger generation has decided you are obsolete. It’s time to reinvent yourself and have some fun doing something you had no time to do before.


  • Marbella says:

    I’ve retired three times already, but after 3-4 months, I can not sit still, but starts a new project and company. Many pensions have so much experience that companies can benefit from, so there is much still to give.

  • Jean says:

    Yea, nowadays, more and more people are working past retirement, especially for those who loved their jobs all through their lives and woke up every morning looking forward to working. I do see the point about younger people getting shut out longer but in the end, it’s at the digression of the employer about keeping on whoever he thinks gets the job done the best.


  • William Lee says:

    I think that working until the age of 55 is the best. If possible, I would want to retire as early as possible. Then, I can focus fully on blogging and make money online. 🙂

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