By: Michael Russo
For generations, retirement was thought of as a hard stop. You worked until 65, then stepped away completely. But today, that traditional model is shifting. More Americans are redefining retirement as a new phase of life, one that often includes part-time work, consulting, or other forms of continued engagement.
Beyond 65: The Next Chapter of Work and Purpose
Roughly 19% of Americans age 65 and older are still part of the workforce today, the highest share in more than five decades. That number continues to grow as more retirees’ rethink what this stage of life can look like. This share has steadily increased as longer life expectancies, rising costs, and improved health have reshaped what retirement looks like.
Research from Pew (2025) shows that the number of older Americans working past traditional retirement age has more than doubled since the mid-1980s. Longer lifespans, better health, and a desire for purpose are driving many to stay active, while rising costs make part-time work, consulting, or short-term projects a smart way to maintain financial flexibility.
We believe retirement today isn’t about stepping away completely. It’s about finding a rhythm that fits your goals, keeps you engaged, and helps you enjoy the years ahead with confidence.
Why More Americans Are Choosing to Work After 65
For many retirees, working beyond 65 isn’t about needing to stay busy, but rather staying balanced. People are living longer, healthier lives, and that shift has changed what financial stability and personal fulfillment look like in retirement. What used to be a short, well-defined phase has become a decades-long chapter that calls for both flexibility and purpose.
We identify ways to help manage the tax impact of part-time earnings, Medicare surcharges, and investment income.
Financial Security
Longer life expectancies mean savings must stretch further than ever. Life expectancy today averages about 75.8 years for men and 81.1 for women, and that’s continuing to rise. Earning part-time income can help ease reliance on retirement accounts, cover healthcare expenses, and preserve long-term financial confidence.
Social Security Strategies
Working part-time after 65 can also be another way to strengthen future Social Security benefits. Delaying benefits allows retirees to receive larger monthly payments later, while claiming early can result in a permanent reduction. With full retirement age now 67 for those born after 1960, timing matters more than ever.
Flexibility, Purpose, and Engagement
For others, it’s not just about the income. Studies show that over 43% of adults at retirement age report feeling lonely, which can affect both mental and physical health. Staying active through remote work, consulting, or passion projects can provide a renewed sense of purpose and community, all while keeping a flexible schedule that fits this stage of life.
The Hidden Trade-Offs of Working Past 65
We believe working after 65 can offer freedom, flexibility, and financial advantages, but it also brings a few complexities that are easy to overlook. Understanding these factors in advance can help retirees make smarter decisions about income, healthcare, and taxes.
Social Security Benefit Reductions
Claiming benefits before full retirement age while continuing to work can reduce monthly payments. The Social Security Administration withholds $1 in benefits for every $2 earned above the annual limit until you reach full retirement age. Once that milestone is reached, benefits are recalculated to include the withheld amount, but the temporary reduction can still affect near-term cash flow.
Additional Medicare Expenses
Working past 65 can sometimes raise income enough to affect Medicare premiums. In 2025, the standard Part B premium is $185 per month, but higher-income retirees may pay more through IRMAA surcharges once their modified adjusted gross income (MAGI) exceeds about $106,000 for single filers or $212,000 for joint filers. Part B surcharges range from $74 to $443.90 per month, while Part D surcharges range from $13.70 to $85.80 per month. Understanding how part-time income impacts these brackets can help retirees plan ahead and manage healthcare costs more effectively.
Taxation of Benefits
Working in retirement can change how much of your Social Security is taxed, but the rules look different under the One Big Beautiful Bill Act (OBBA). OBBA added a new senior deduction that lowers taxable income for many retirees, which means most people will owe little or nothing in federal tax on their Social Security. Higher-income households may still have up to 85% of their benefits taxed, since the IRS still uses combined income rules to determine taxability. Planning wages, withdrawals, and timing with these rules in mind can help keep taxes lower.
Turning Work into a Retirement Strategy
When approached with intention, part-time work can be a powerful way to strengthen your retirement outlook. The income you earn in your late 60s can bridge everyday expenses while your savings continue to grow, giving your investments time to recover from market swings. Even modest earnings can ease the pressure to withdraw from retirement accounts, helping preserve your portfolio and improving the chances that your money lasts as long as you do.
How Millstone Financial Can Help
At Millstone Financial Group, we recognize that every retiree’s situation is different. What works for one person may not fit another’s goals, lifestyle, or income needs. That is why we believe having a trusted guide matters. Our team can help you understand how the different moving parts of retirement work together so you can make confident, informed decisions in this new reality with:
- Retirement income modeling
We run scenarios that combine wages, withdrawals, and Social Security timing so you can see how your choices affect cash flow over time. - Tax-smart strategies
We identify ways to help manage the tax impact of part-time earnings, Medicare surcharges, and investment income. - Social Security analysis
We help you evaluate when to file and how working part-time may affect your benefits. - Portfolio management
We balance growth and stability so you can draw from your accounts at a comfortable pace, continuously adjusting as your health, goals, and needs evolve.
Bottom Line: Working part-time after 65 is not a setback. We think it is a proactive strategy to help create balance between income and independence, work and leisure, purpose and flexibility. With the right guidance, it can become a strategy that strengthens your finances and enhances your overall quality of life.
To start the conversation, schedule a complimentary consultation by calling (732) 385-8544 or emailing info@millstonefinancial.net.
Disclosure:
Insurance products and services and Advisory services offered through Millstone Financial Group Limited Liability Company dba Millstone Financial Group, an Investment Advisor in the State of New Jersey. Millstone Financial Group is not affiliated with or endorsed by the Social Security Administration or any other government agency.
Advisory services are offered through Millstone Financial Group Limited Liability Company, a Registered Investment Advisor in the State of New Jersey. Insurance products and services are offered through Millstone Financial Group Limited Liability Company.
All material discussed is for informational purposes only. Opinions expressed are solely those of Millstone Financial Group Limited Liability Company and staff. All topics covered are believed to be from reliable sources; however, Millstone Financial Group Limited Liability Company makes no representations as to its accuracy or completeness. Investing involves risk including the loss of principal.
This article shall in no way be construed as a solicitation to sell securities or investment advisory services to residents of any state other than New Jersey, or where otherwise permitted. All information and ideas should be discussed in detail with your individual adviser prior to implementation.
Millstone Financial Group Limited Liability Company dba Millstone Financial Group does not offer tax planning or legal services but may provide references to tax services or legal providers. This material is intended to provide general financial education and is not written or intended as tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Millstone Financial Group may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters. You should always consult with a qualified professional before making any tax or legal decisions.
Sources (in order of use):
- U.S. Bureau of Labor Statistics, Employment projections for older workers. (2025).
- Pew Research Center: “More U.S. Residents Are Working Past Retirement Age” — dated. (2025, August 4).
- Centers for Disease Control and Prevention. (2025, June 5). Life expectancy at birth – United States.
- Kiplinger. (2025, August 14). How a part-time job in retirement can boost your social life.
- “How Work Affects Your Benefits.” Social Security Administration. (2025).
- Kiplinger. (2025, September 25). What you will pay for Medicare in 2025.
- Kiplinger. (2025, September 25). What you will pay for Medicare in 2025.
- Internal Revenue Service. (2025, July 18).
- One Big Beautiful Bill Act: Tax deductions for working Americans and seniors.
