Nearly half a million Americans over the age of 80 are still working, while the 75-plus
demographic is the fastest-growing segment of the workforce. For some, the choice to keep working is about staying active and engaged. For others, it’s necessary amid rising health care costs, a longer life than their savings anticipated, or the need to support a spouse or loved one.
But whether out of necessity or passion, working into your 70s, 80s, and even beyond comes with financial, health care, and estate planning implications. If you — or a parent, spouse, or grandparent — are still in the workforce at this stage of life, consider the following:
Financial Planning and Health Care
Earning wages in your later years can affect how your income is taxed and how retirement benefits work.
- Tax impacts of earned income. Additional wages can push Social Security benefits into taxable territory. Up to 85 percent of your Social Security may be taxed depending on your combined income. Review your tax situation each year to anticipate Social Security taxation.
- Required Minimum Distributions (RMDs). Even if you’re still working, once you turn 73, RMDs from individual retirement accounts (IRAs) and most other retirement accounts are mandatory. The only exception may be a 401(k) from a current employer. Coordinate withdrawals from retirement accounts with ongoing income.
- Pension offsets or reductions. Some pension plans reduce benefits if you earn income past a certain age or continue working past retirement age, while others allow continued accrual of credits. Check with your pension administrator or human resources department to understand any reductions or offsets.
- Employer coverage vs. Medicare timing. Staying on an employer plan can affect when you enroll in Medicare Parts A and B. Missing deadlines can lead to penalties or gaps in coverage. Confirm Medicare enrollment and coordinate with employer benefits.
Estate Planning
A longer working life can mean a more complex financial picture. Assets may grow, family circumstances may shift, and planning documents may need to be updated accordingly.
- Updating wills and trusts. As wealth or family circumstances change, your estate plan should reflect current realities. Review all estate planning documents every five years or after major life changes.
- Business succession. If you run a business past retirement age, clarify succession plans and how ownership will transfer. Coordinate business succession with estate planning to avoid disruption.
- Powers of attorney and health care proxies. These documents can prove vital if sudden incapacity strikes mid-career. Keep them updated.
- Legacy vs. liquidity tension. Spending down assets for your own needs versus leaving an inheritance can require a careful balancing act.
Retirement today is less about a fixed age and more about personal circumstances. The shifting reality of work creates new planning challenges that traditional retirement advice often overlooks. Working later in life changes how you should plan your finances, health care, and estate. Careful planning is necessary at every age. But extra or different planning may also be necessary when working later in life.