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Retirement once meant moving away from work, but many Gen Xers now look forward to a second act.
A Northwestern Mutual Planning and Progress Study Many people doubt that they will be financially prepared, making future income part of the plan.
This means that more than half of Gen X retirees are thinking about working again. These experts explain how they should go about it.
Do you really need to work out?
Before looking for a job, financial experts say the first step is to determine whether the work is truly necessary or merely a reaction to market uncertainty.
“A clear cash-flow and tax projection can show whether modest spending adjustments or a better exit strategy solve the problem without re-entering the workforce,” said Christopher Stroup, founder and president of . silicon beach financial.
Stroup explained, “If the gap is short-term or market-driven, work may be optional. If it is structural, earned income can add meaningful flexibility.”
before taking the job
Before accepting a role, retirees should review how the additional income fits into their existing retirement plan.
Chad Gammon, a certified financial planner and owner Custom Fit Financialsaid retirees should calculate the income gap they need to fill and review how salary at age 62 could affect the ACA premium credit and Social Security.
Once income starts
Once earnings begin, the impact goes beyond the initial profit review. Extra income balance can make a big difference in retirement planning.
“Even part-time work could push retirees into higher tax brackets, increase Medicare premiums or alter the optimal timing for Social Security,” Stroup said. “Health coverage is another blind spot because losing ACA subsidies or mishandling Medicare enrollment can be costly and hard to overcome.”
choosing the right job
Once the financial impact is understood, the next question becomes what kind of job is best suited to a retirement lifestyle rather than a career routine.
“If you’ve enjoyed the area you’ve retired to and you need a new environment, staying in that area or seeking counseling is a good option,” Gammon said. “It will also probably pay closest to your old salary. If that doesn’t sound appealing, look at jobs you think you’ll enjoy with less stress and flexibility.”
bottom line
It’s common for Gen Reviewing income needs, understanding how earnings affect benefits and choosing a role that fits the life stage additional work can help support rather than disrupt retirement planning.