5. Financial Tips for People Who Will Never Retire

Why retire when working is enjoyable?While Financial Independence Retire Early is widely practiced, some individuals plan to do the opposite and never retire – working simply because it brings pleasure is their goal; why settle when at your peak of performance?

Researchers from Pew Research Center note the trend toward working longer is on the rise, both numerically and percentage-wise. As Pew reports: “Numbering roughly 11 million today, older workers have nearly quadrupled since 1987 – today 19% of adult ages 65 or over hold jobs as opposed to only 11% back then”.

Why Are People Working Longer? Working later in life provides many other advantages aside from just making more money such as:

Intellectual stimulation, regular social interactions and an predictable weekly schedule provide intellectual stimulation; keeping abreast of technological advancements means sharing knowledge.
Here are a few financial strategies for those planning on continuing working:
1. Plan for Financial Independence, Not Retirement
To maximize financial success, financial planners know the secret is planning for financial independence rather than retirement as the goal. Financial independence means having assets and income streams sufficient for lifelong support of lifestyle. Working as you see fit rather than out of necessity should always be your goal.

Never assume you will always have access to work. Financial independence provides peace of mind if something arises that impedes your ability to perform your current duties such as health issues or job termination.

Be mindful that your plans may change; nobody knows what lies in store, so allow yourself the freedom of making a different choice in case anything arises that requires changes in direction. 2. When turning age 70 or later, begin receiving Social Security benefits immediately and do not delay taking these payments further.

Workers often delay taking Social Security benefits in order to take advantage of estimated annual increase of 8 % benefit amounts. If you still require income for daily expenses, delaying taking your benefits past full retirement age might make sense.
Be mindful not to postpone taking Social Security benefits once age 70 has been reached; no benefit exists in continuing to put off taking it and investing the proceeds if it won’t cover lifestyle expenses.
3. Plan Tax-Savvy Investments
If you have extra income after contributing the maximum 401(k), look into tax advantaged investing opportunities. Non-Qualified Deferred Compensation plans offer another tax savings alternative: by deferring part of your salary pre-tax with these plans if eligible – speak to your company’s benefit specialist to learn more!
Make tax-advantaged investments outside your retirement plans. Interest income such as that from bank accounts is subject to ordinary income rates; for this reason it might be wiser to choose investments such as tax-free municipal bonds and fund investments or those offering qualified dividends which have more favorable taxation structures.
Consult with both your tax and financial advisor regarding tax-favored investments if your marginal tax bracket is high.
4. Maximize Your Health Savings Account If you have a high deductible medical plan through your employer and do not yet qualify for Medicare, and are not taking part in Medicare Part D plans, a Health Savings Account could offer significant tax advantages if used for qualified medical expenses. An HSA investment is pre-tax; tax deferral means funds grow tax free over time until funds can be pulled out tax free to use towards healthcare costs – in 2024 this limit stands at $4150 for an individual plan or $8300 if part of family plans; workers aged 55 or over can make additional catch-up contributions of up $1,000 catch-up contributions!
After age 65, should your health care needs change after being covered by your HSA funds, penalty-free withdrawals are available without incurring an IRS penalty or tax on distributions to nonqualified expenses. As HSA eligibility and penalty free withdrawal rules can be complex for workers over 65, be sure to seek tax advice when considering making withdrawals or distributions from an HSA account.
5. Understand Your Required Minimum Distribution Rules
It is crucial that you meet the rules regarding Required Minimum Distributions from traditional IRAs or qualified retirement plans, according to IRS requirements. As the beginning date for required minimum distribution is April 1 of the calendar year in which you reach age 73, be certain not to miss that deadline by working closely with financial and/or tax advisor. Penalties for not complying can reach 25%; be sure not to miss it!
Do not assume you are automatically exempt if you are still employed; though your current employer’s plan might be exempt, RMD rules still apply to IRAs and former employer plans even though you remain working.
However, prior to making any plans with your employer or retirement plan document. Check whether continued deferral of payments is allowed under their plan documents.
Working may feel like an endless grind to some people, but when it’s something that brings joy it becomes entirely different. Being financially independent gives you more options as to where and when to spend your time. Working can even serve as an inspiration when faced with daunting daily commutes! So why quit when things are fun and enjoyable?