Generating Retirement Income

• You can increase your Social Security retirement benefits. If you delay taking Social Security retirement income, your benefits may continue to increase until age 70. For more details on the potential impact of delaying Social Security, read this informational document from the Social Security Administration.
• Your employer may provide health insurance. Rising healthcare costs have historically outpaced the rate of inflation. As much as inflation can decrease your purchasing power, the impact of rising healthcare costs is even sharper. By working during retirement, you might not have to dip into your savings to cover healthcare costs, as long as your employer provides health insurance.
• Your employer may let you contribute to your 401(k). Your capacity to continue making contributions to your 401(k) can be a plus, especially if your employer matches your contributions. Try to max out your contributions if possible. This will increase your available retirement savings for when you are ready to make withdrawals.

Social and Health Benefits

• You can stay physically and socially active. Depending on the kind of work you do, the work environment can be socially and physically engaging.
• You can fill your time in a meaningful way. Retiring into a work-free lifestyle might feel like a holiday at first, but over time might feel empty. Going to work, even part time, can give you a reason to get up in the morning, a sense of accomplishment and meaningful engagement.
• You can use your skills to learn something new. If your work environment allows you to develop your skills, then work might provide you with continuing personal growth. This may positively impact your overall physical and cognitive health.
• You may be able to choose the work you take on. Having reached the heights of your work experience and expertise, you may have the opportunity to choose work you feel is rewarding, beneficial and meaningful to you.

Potential Caveats to Creating Retirement Income

• Taxes. You’ll likely need to pay federal and state income tax on the wages you earn as you continue working.
• If you are taking Social Security retirement benefits before full retirement age, your benefits may be reduced while you are working. For 2025, the yearly earnings limit is $23,400. If you earn more than that amount, $1 will be deducted from your Social Security retirement benefit payment for every $2 you earn above the annual limit. Different rules and a higher limit apply for the year in which you reach full retirement age. For more details, see the Social Security  website.
• Your Social Security benefits may not be reduced if you are working after you reach full retirement age. If you work after reaching full retirement age, your Social Security benefit will not be reduced. However, you might still want to consider delaying your Social Security benefits until you turn 70.
• Drawing a salary may increase your Medicare premiums. The standard monthly premium for medical insurance (part B) may increase depending on your income. Your monthly premium for Medicare prescription drug coverage (part D) will also vary, with higher-income earners paying more. You can find a quick summary and more detailed information on Medicare’s costs page.
• If you have a pension, returning to work may or may not affect your pension benefit. If you are working for the same employer offering the pension, check with your employer to see if your working status reduces or forfeits your right to collect a pension. If you are receiving income from another employer, you may still be able to receive your pension from a previous employer, but be sure to verify.

Consider Lifestyle and Financial Goals

Working during retirement can help you generate valuable income. You might be able to use this income to bolster your retirement savings or simply to cover expenses until you opt to start receiving your Social Security retirement benefit. Employment may also provide health insurance and let you contribute to an employer-sponsored 401(k) plan.

Figuring out whether or not to work in retirement is more than an economic decision. You might also want to consider how you’d like to spend your time, how you’ll stay active and connected, and what you’d like to learn. Employment may or may not help you meet those lifestyle objectives.

Regardless of what you decide, carefully considering both lifestyle and financial factors can help you realize a retirement that will work for you. If you’d like assistance planning your retirement, Fisher Investments may be able to help Give us a call today or download one of our guides to find out more.

¹ Megan Wilkins. Beyond the Numbers (publication). “Golden years: older Americans at work and play.” U.S. Bureau of Labor Statistics, May 2025. https://www.bls.gov/opub/btn/volume-14/golden-years-older-americans-at-work-and-play.htm#:~:text=Of%20the%20168.1%20million%20people,were%20age%2065%20and%20older