Phase One: Celebrating and Settling In

Many new retirees find that there is an initial period of adjustment as their identity as an employee or business owner changes to one of retiree. Not setting an alarm and having a set pattern of daily activity can be both exhilarating and disorienting. After the initial freedom celebration and the joy of a “permanent vacation” wanes, many retirees wonder what to do with their time. Do I volunteer, travel, seek part time employment, spend all my time with family, or start a second career? Having a road map in mind before you spend your last day in your office of many years is a great first step.

Should I Work?

More retirees are working freelance, consulting or short-term projects for companies and organizations in their communities. This is referred to as the “GIG economy,” and 24 percent of the participants are between the ages of 55 and 74. The motivation for working after retirement varies. Many just enjoy work. Others want additional money to fund a lifestyle; pay for a vacation; provide benefits, such as health care; or just make ends meet.

The decision to work may impact important components of your financial plan. Earned income may allow you to delay starting to withdraw from your IRA, and could allow you to delay applying for social security benefits for a period of time. However you may not delay IRA distributions and social security benefits forever. Drawing social security retirement benefits while working may also reduce your social security benefit if certain conditions exist. It is important to consult with a financial advisor to fully understand the impact of working on your social security benefits, particularly if you have not attained “full retirement age” according to social security regulations. An F&M Trust relationship manager can assist you in navigating through these choices.

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