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Investing Specialists

Working Past 65? Don't Overlook the Financial Side Effects

Earning a paycheck has ramifications for Social Security, taxes, and health care, among other factors.

Working past the traditional retirement age of 65 is the fallback strategy for many people hurtling toward retirement but concerned they haven't saved enough. And indeed, the financial benefits of deferring retirement can be potent. Continuing to work means continuing to save, for one thing, and even more important, deferring withdrawals from your investment kitty also reduces the number of years you'll need your investments to last. Working longer also often means deferring Social Security, which itself delivers a sizable inflation-adjusted compounding benefit.

But continuing to work past the traditional retirement age--or even part time during retirement--can bring unintended financial side effects, some good, some bad. These issues should, of course, play second fiddle to the key factors surrounding whether to continue to work: whether you want to, whether you're able to, and whether continuing to earn a paycheck will have a meaningful effect on your bottom line. That said, here are some of the secondary financial issues to bear in mind as you assess the merits of working past 65.