Why You Need to Supplement Your Income During Retirement

The prospect of retirement triggers good feelings, including the idea of spending extended periods of time traveling the world and living on the fortunes amassed after years of hard work. However, with the economy in shambles and the future of entitlement programs currently up in the air, it seems that many future retirees may have to plan for something they had never even contemplated: maintaining a part time job during retirement.

Part-Time Work a Holiday, Rather Than Task

Traditionally, retirement planning excluded part-time work, but many seniors still opted for part-time employment as a way to escape days on end at home. The idea of working part-time was to meant to entertain the mind, but today the ideology has shifted towards working for extra income, rather than just a daily escape.

Planning Without Entitlement Programs

Unless your retirement will come within the next decade, you should begin considering the idea that Social Security might not be there when your retirement arrives. For many retirees, the regular checks from the Social Security program are the monthly breadwinners providing money for necessary expenditures. Thinking about retirement without Social Security makes the process that much more painful, as you’ve already piled thousands of dollars into the program through a tax-assessment on your paycheck.

The 80% Rule Isn’t Always True

Financial planners recommend that retirees will need 60-80% of pre-retirement spending during their golden years. However, in many cases, this plan may be absolutely wrong and cripple a retiree’s standard of living as cost of living increases and higher medical and prescription drug costs eat into monthly budgets.

Part-Time Work Adds the Extra Income Needed

The average Social Security check is a tiny $1007 per month, which is hardly enough to live an ordinary life in modern America. Assuming that Social Security is still in existence and payouts remain the same, part time work can add a huge percentage gain to your monthly budget. Even at a rate of 15 hours per week, a part time worker could add roughly $400 per month to the bottom line. That’s an income increase of 40% per month over your Social Security payment, allowing most retirees enough room to buy all of life’s essentials. Retirees with home mortgages or large car payments may find that making it month by month may require more hours.

Lock in the Job Now

Employers are quickly cutting back on their employees to reduce costs. However, there is good news. Although many full time positions are dropping, employers are picking up part time employees to eliminate the high cost of benefits, such as health care and other co-op insurance programs. If you have just a few short years to retirement and think you might need a part-time job, then now is the perfect time to start the job hunt. If anything, you’ll have to spare just a few hours a week to maintain the job and have extra money to throw into your portfolio. Many employers even offer employee discounts, which could certainly come in handy in these tough times.