Earning too much may slash your net earnings due to taxation
Although retirement gigs may increase Social Security benefits (bear in mind this applies if you earn at high levels), you may have your net earnings actually reduced because your benefits have become taxable. This is something seniors with retirement gigs tend to forget, with some of them not even knowing that.
If you’re a single filer and your combined income is between $25,000 and $34,000, up to half of your benefits are subject to tax. If your combined income exceeds $34,000, up to 85% of your retirement benefits may be taxable.
For joint filers, any amount between $32,000 and $44,000 is subject to taxes of up to 50%, and the threshold for 85% taxation is $44,000.
According to financial experts, retirement gigs are going to be a really powerful lever to boost the money available in your senior years because you’re not breaking your nest egg and it offers you more of an opportunity to set aside.
Don’t assume you have to pound the pavement looking for a high-paying job with great benefits. A 2020 study found that for seniors 62 and older, even retirement gigs that don’t provide health and other benefits can substantially improve retirement security.
