Strategies for a successful retirement

Working part-time can make the glide path to retirement smoother. The key is earning on your terms while steering around avoidable taxes, Medicare surcharges, and Social Security givebacks. Here is a clear plan with fewer headlines and more practical detail where it counts.

If you claim before full retirement age, the earnings test may temporarily withhold checks when wages are high. For 2025 the annual limit is 23,400 dollars if you are under full retirement age all year, and 62,160 dollars in the calendar year you reach full retirement age for the months before that birthday. SSA credits back withheld months in your benefit formula once you hit full retirement age, so money is not lost, but your cash flow can be bumpy if you overshoot.

Only wages and net self-employment count for this test. Pensions, portfolio withdrawals, and capital gains do not. If you retire mid-year, SSA’s monthly test can help keep checks coming in any month your earnings are 1,950 dollars or less in 2025, and the special monthly limit for those reaching full retirement age is 5,180 dollars. Plan your hours with those thresholds in mind.

At 65 and older, focus on MAGI because Medicare uses it to set IRMAA surcharges. The 2025 standard Part B premium is 185 dollars per month, and higher MAGI from two years prior can raise Part B to 259–628.90 dollars and add 13.70–85.80 dollars to Part D. For 2025 premiums, IRMAA brackets start at 106,000 dollars for single filers and 212,000 dollars for joint filers, based on 2023 MAGI. The surcharges can feel steep, yet they are predictable if you watch your year-end totals. (CMS and Medicare.gov publications, NerdWallet summary.) (CMS)

If you retire or cut hours and your income drops, you can ask Social Security to use a more recent year by filing Form SSA-44. Life-changing events like work reduction, work stoppage, divorce, or the death of a spouse may qualify, which can trim IRMAA sooner rather than later.

Not yet 65? Marketplace premium tax credits remain enhanced through 2025, which means careful income targeting can preserve valuable help. A small bump in wages or a Roth conversion late in the year can shrink subsidies, so build in a cushion when you choose hours.

Part-time status can still support strong saving. For 2025, the 401(k) elective deferral limit is 23,500 dollars plus 7,500 dollars in catch-up at age 50 and older, and ages 60–63 can use an enhanced catch-up of 11,250 dollars if the plan offers it. Traditional IRA limits remain 7,000 dollars plus a 1,000 dollar catch-up at 50 and older. These numbers give you room to dial income and deferrals to hit the MAGI target you want.

One timing item for higher earners is the SECURE 2.0 rule that requires catch-ups to be Roth when your prior-year wages with that employer were 145,000 dollars or more. The mandate starts in 2026, so 2025 is your window to decide how much pre-tax deferral you want this year and how your mix may change next year.

Access to workplace plans is improving for part-timers. For plan years beginning in 2025, many plans must let long-term part-time employees who work at least 500 hours in two consecutive years make salary deferrals, with service counting from 2023. If you shift to part-time at the same employer, ask HR exactly when you become eligible to contribute.

Health savings accounts still matter before Medicare. The HSA contribution limits for 2025 are 4,300 dollars for self-only and 8,550 dollars for family coverage, plus 1,000 dollars in catch-up at 55 and older. HSA contributions reduce MAGI, which can help with ACA subsidy planning now and future IRMAA in later premium years.

Putting these pieces together turns into a simple rhythm. Estimate part-time wages each fall, add other taxable income, and preview where your MAGI lands relative to IRMAA brackets or ACA subsidy cliffs. Then adjust hours, pre-tax 401(k) deferrals, and HSA contributions so your paychecks fit the plan without surprises.

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.