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A recent survey by Guardian Life suggests that more than 50% of Americans expect to supplement their retirement income by working part-time. While that may sound like a safety net, relying on a post-retirement paycheck carries risks: your health, the job market and life changes can all interfere.
Retirement shouldn’t mean trading one job for another. The aim is financial independence, so that part-time work, if it happens, is by choice. Strategic use of Individual Retirement Accounts (IRAs), catch-up contributions and Social Security can all help make that a reality.
The Risks and Realities of Part-Time Work in Retirement
It’s easy to underestimate how life’s unpredictability can derail a plan to work in your later years. Health challenges, labor market shifts or evolving job skills mean that part-time work isn’t guaranteed. Moreover, relocation and family obligations might limit your ability to work in later years.
To reduce your dependence on labor, you’ll need a robust combination of:
- Solid savings and investment growth, potentially through an IRA
- Tax-efficient account strategies
- Thoughtful Social Security timing
- Backup income reserves, like cash and annuities
The goal is to make part-time work optional—not essential.
Why IRAs Are Especially Useful for Retirement Security
An IRA can play a pivotal role in reducing reliance on post-retirement work.
- Tax advantages during savings and withdrawal. Traditional IRAs offer tax-deferred growth and potentially lower taxable income during your working years, while Roth IRAs provide tax-free qualified withdrawals in retirement. Either way, you gain flexibility in managing your tax exposure later.
- Catch-up contributions for those 50 and older. In 2025, individuals can contribute an extra $1,000 beyond the $7,000 annual limit, giving those nearing retirement a final boost to their savings.
- Compounding potential. Both types of IRAs allow investments to grow without immediate tax drag, helping your nest egg last longer—especially valuable if health or economic changes limit your ability to work later in life.
- Withdrawal flexibility. While traditional IRAs require minimum distributions starting at age 73, Roth IRAs do not—allowing retirees to control their withdrawal timing and preserve tax-advantaged growth.
By contributing regularly and using catch-up limits once eligible, you can build a more reliable stream of income—one that makes work optional rather than necessary.
Social Security, Part-Time Work and Earnings Limits
Claiming Social Security before you hit full retirement age (FRA) can temporarily reduce your benefits if you keep earning income. In 2025, anyone under FRA for the entire year can earn up to $23,400 without penalty. Beyond that, $1 in benefits is withheld for every $2 earned over the limit.
If you reach FRA during 2025, the income threshold before your FRA month rises to $62,160, and the reduction rate softens: $1 is withheld for every $3 earned over the limit, but only in the months before you reach full retirement age. After you’ve reached FRA, these limits disappear—you can earn as much as you want without benefit reductions.
Importantly, benefits withheld by excess earnings are not lost forever. When you reach FRA, your benefit is recalculated to account for the withheld months, resulting in a higher total benefit.
If you plan to work part-time while collecting Social Security early, run projections to ensure your earnings won’t trigger large offsets or distort your cash flow.
Bottom Line
Working part-time in retirement can be a helpful supplement, but it shouldn’t be the foundation of your financial plan. The more you can build up diversified savings, through IRAs, employer plans and deliberate Social Security timing, the less you’ll have to rely on unpredictable labor markets later in life.
As longevity and costs rise, retirement security increasingly depends on flexibility, not just income. The best position to be in is one where work is a choice, not a requirement.