There is an increasing number of part-time workers because it provides them with an opportunity to get into high-paying hourly jobs, flexible working hours, and more leisure time.
However, with all the perks, part-time work has some serious drawbacks when it comes to retirement. Unlike full-time jobs, they don’t get health insurance and retirement plans, part-time workers have to completely depend on their own savings for old age. According to research, part-time workers are less likely to enjoy retirement; they keep working at an older age to afford their expenses.
However, if a part-time worker is determined to save money for retirement, make smart investments in yield-paying securities, and is comfortable doing more than one job, then he might be able to enjoy his retirement comfortably.
Here, we will discuss some strategies through which part-time workers can prepare their retirement plans.
Acquire More than One Job
A particular part-time job is limited to a particular time frame or duration. Therefore, part-time workers should discipline their day in a way that they could do multiple jobs in a day to earn as much as possible. Working on multiple income streams will enable the worker to keep aside more money for his retirement funds.
Buy Suitable Insurance Policies
It is obliged by law for every citizen to have some health insurance policy to enjoy the benefits later. Hence it is compulsory for part-time workers too. To get the most suitable and cheap policy, they might have to forgo some coverages like life insurance or disability insurance.
Policies can be bought from individual markets; the part-time worker should seek discounted insurance policies or other products. Also, government subsidies are available for workers whose income is below the poverty line. These subsidies are to ease payments associated with state and federal health insurance policies. Besides this, there are many groups and organizations which offer group insurance, and other products and services at a discounted rate.
Open Health Savings Account
Health insurance policies are often expensive to buy on the individual markets and come with a high deductible. However, in this case, high deductibles are beneficial for part-time workers as they make them eligible to acquire health savings accounts (HSAs). These security accounts enable workers to save money for future health expenses. The account rolls over money every year and it is tax-free.
Money withdrawn from the account for authentic health care expenses is not taxable, and after the age of 65, money can be withdrawn for any reason; however, there is a tax penalty on the money withdrawn for non-health expenses prior to the holder’s 65years of age.
Withdraw Social Security Benefits at the Right Age
Part-time workers should wait to reach their full retirement age, which is 70 years before they can claim benefits. This will increase their benefit amounts, for every year an employer waits to receive social security benefits, he gets an 8% increment to the amount until they reach the age of 70. The increased benefit amount can cover nearly 80% of pre-retirement expenses.
Should Have Realistic Expectations
Part-time workers should be realistic when they assume their retirement life, they cannot expect to be very happy and comfortable, as during their working life they earned comparatively less; hence they saved less. After seeking retirement they should keep their expenses lower and keep money saved for a bad time.
Part-time workers should be realistic about their retirement life according to the efforts, smart yield producing investments, and saving they did during their working life and plan their retirement accordingly.
Look for Part-Time Retirement Jobs
There are many part-time retirement jobs available for retirees, which can pay more than 20$ per hour. Part-time workers can engage themselves in retirement jobs that are interesting to them to keep on earning some extra money.
Having a retirement plan is equally important for full-time workers and part-time workers. However, as part-time workers cannot enjoy employer-contributed health insurance policies or 401(k) retirement plans, they need to be more vigilant and intelligent in their retirement plan strategies by analyzing their savings, other sources of income, and their desired lifestyle to enjoy the perks later.
Also, if you are looking to do some side hustles, meaning you don’t want to be work-shy in your retirement, consider the employment options available for retirees first.