“4. Be prepared to make less money – a lot less
“[Sara] Rix says they did a study that looked at midlife career changes, both voluntary and involuntary, and found that older worker who make changes typically experienced earnings and benefit reductions in new jobs, but had more flexible work schedules and were overwhelmingly satisfied.
“Tom McGuigan, principal with Exencial Wealth Advisors in Old Lyme, Conn., tells his clients to consider three things in planning.
“First, they need to be really conservative. If someone starts working part time, they will not make anything near what they did before. Not only should they be conservative on how much they think they will earn, but also in the idea of how many years they will be able to work. ‘Sometimes, health is a problem’, he says.
“’The second thing is to remind people that if you think you need an extra $20,000 of semi-retired income to make things work, don’t forget there are substantial taxes – federal, state, as well as payroll. Or if you are self-employed, double the payroll tax’.
“Finally, keep in mind that if you are under the full retirement age and plan to draw Social Security benefits early, if you earn more than $15,120, your benefits will be reduced, McGuigan says. ‘We can’t double count that’.”