Why Educators May Find It Works to Work in Retirement

A retirement that includes a fulfilling job can keep you challenged and on top of your game.

Senior woman working with orchids in a greenhouse

by NEA Member Benefits

Key takeaways

  • Working in retirement can keep you more active, alert and engaged with life.
  • Earning money can supplement retirement savings and pension benefits.
  • Follow your passion, leverage your experience and get involved with work that you love.
  • Understand how earned income may affect your tax liabilities and Social Security benefits.

A generation ago, retirement meant stepping away from work. Today, more retirees are earning income by working in some capacity. According to the American Working Condition Survey from the RAND Corporation, more than half of retirees age 50 and older reported that they would work in the future if the right opportunity came along. And the survey found that 39 percent of workers 65 and older who are currently employed had previously retired at some point.

Working supplements your income

One of the primary reasons people go back to work after retiring is to generate additional income, often because they didn’t save enough throughout their career. Other reasons include a desire to take on new challenges and simply keep from getting bored. Regardless of the reason, many folks working in retirement are doing so out of choice so they tend to be highly satisfied and engaged in their work.

If you decide to go back to work, you’ll find that the additional free time you now have, coupled with fewer major expenses such as mortgage payments and college tuition, may give you a bit more job hunting flexibility. You could look for part-time work, freelance opportunities or even start your own business.

Here are a few things to keep in mind:

  • Leverage your experience — Your training as an educator may naturally guide you into a teaching-related job similar to, but not necessarily exactly the same as, your previous subject expertise.
  • Stay open to something different — Sometimes, veering off on a completely new path can be invigorating, keeping you engaged and challenged. Part time work may offer a more balanced solution, leaving you time to pursue other interests.
  • Do what you’re passionate about — Especially if pay is of secondary concern, get involved with something you truly love, even if the salary is low.

Earned income may affect other income sources

Many teachers who are eligible for Social Security may already be facing reduced Social Security benefits due to the Windfall Elimination Provision. If you’re collecting early Social Security benefits, meaning you applied before your full retirement age, benefits are reduced. If you then also start earning income, those already reduced benefits may be cut even further. Once you reach your full retirement age, you can work all you want and your Social Security will not be reduced due to earned income. The rules around benefit reductions can get complicated, so visit the Social Security website for details.

Also, be mindful of how your earned income may combine with pension distributions and any required minimum distributions from retirement savings plans may slide you into a higher tax bracket. Tax planning is different for everyone, so it’s best to discuss with your tax professional about how adding a paycheck to your other retirement income sources may affect your taxes.

Follow your heart and feed your mind

By the time you reach retirement, you’ve accumulated a lifetime of knowledge and experience and it seems a shame not share that in some way. Working in retirement may be just what you need to keep yourself feeling sharp, active and worthwhile. Besides, it can bring in some extra cash to help pay the bills.

Explore the NEAMB Retirement Options to maximize your retirement goals.