The idea of retirement has long conjured up images of leisure and travel, but a majority of workers also see the value in continuing to collect a paycheck.

While only 29% of today’s retirees do some work for pay, a whopping 75% of pre-retirees expect to work after they officially retire.¹

For some, it may be about the money. Seven in 10 workers and more than half of retirees are concerned inflation will force them to make substantial cuts to their retirement spending.¹ Collecting a paycheck could provide a financial buffer. For others, the benefits may be physical, as post-retirement work has been linked to improved health.²

With some companies adopting remote work as the norm, the ability to do your job from anywhere — even your vacation home — could provide even more incentive to continue working in retirement. If you’re considering doing so, asking yourself the following questions could help you better understand what the extra income might mean for your finances.

Q: How long will I need my retirement assets to last?

At age 65, life expectancy for a man is 82 and a half years; for a woman the same age, it’s more than 85 years.³ “We need to be financially prepared for 100-year lives,” says Cynthia Hutchins, director of Financial Gerontology at Bank of America. “That puts a spotlight on the savings you’ve built up since they need to last for that longer life.”

Q: Can working in retirement increase the chance that I won’t outlive my money?

There are a couple of key financial benefits of working in retirement. First, there’s a greater likelihood that you can put off collecting Social Security. Until age 70, for every year you delay past your full retirement age — 66 or 67, depending on the year you were born.⁴ — your benefit will rise by 8%.⁵ So if you’re thinking about starting to claim at 66 or 67, remind yourself that each year you can wait to claim will earn you an 8% “raise.” By contrast, claiming your benefits at age 62 could cut your Social Security income by as much as 30%.

There’s also this not inconsiderable advantage: By generating income from a part-time job, you may be able to put off dipping into your retirement savings, allowing your investments more time to grow.

You may also find that you can increase your spending rate as a result when you do begin to draw down your savings. Beginning withdrawals at a later age may enable you to create a bit more of a cushion, which could potentially allow you to pursue things you might not otherwise have been able to do and perhaps also be able to give more to future generations.

Beyond the financial benefits, of course, there are other good reasons to consider working in retirement. For many, working is not just about the money and serves as an opportunity to find new interests and pursue different opportunities.

Q: Is there any downside to the extra income?

Earning income in retirement could push you into a higher tax bracket — something you’ll want to discuss with your tax professional. And if you are already claiming Social Security, as much as 85% of your Social Security income could be subject to federal (and possibly state) income taxes.⁶

A portion of your Social Security benefits may also be withheld if you are collecting before your full retirement age (age 67 for those born after January 1, 1960) and your earnings from employment exceed the annual limit.⁷ Once you reach age 65, a higher income can also affect your Medicare premiums.⁸

Before taking on part-time work in retirement, speak with an advisor and tax professional to weigh all these considerations. And start planning early, says Ben Storey, director, Retirement Research & Insights, Bank of America. “The time to do that is five to 10 years before retirement. Then revisit it as you approach retirement — and at any point when your circumstances change,” he says.