Q: Is it strategic to restart retirement savings with a Roth IRA/401(k)?

A: If you are going back to work for the cash flow to make ends meet, I would not recommend restarting an IRA/401(k), since cash flow is critical and your tax bracket may be low, so the tax savings may not be there. Cash outside of a retirement plan may be more practical and flexible. However, if you are going back to get out of the house or for socialization, then yes, you can restart retirement plans for the tax savings and to have more in the future. Personally, I would do the 401(k) if the company has a matching program.

Q:  What will happen to Social Security benefits? Will they be reduced if you have not yet reached normal retirement age?

A: If you are under 65 years of age then you will lose social security benefits based on the amount earned over approximately $15,000 annually. A challenge being that the reduction comes the year after the money is earned, so if you do not work the following year, you will be short earnings and part of the social security. If you are 65 or older there is no reduction of benefits for earnings during the year.

Q: How does going back to work in retirement affect someone's overall tax situation? What's the best way to plan ahead for that?

A: If you work, you may trigger more of your social security to be subject to taxation (if total income including social security exceeds $30,000). Only up to 85% of the social security will be taxed depending on the amount of income shown on your tax return. This applies if you have large interest, pensions, dividends, capital gains, or IRA/401 (k) distributions. Also, it is important to remember that you will be back to contributing to social security out of your wages. Planning just means that you need to reflect all income and make sure you are contributing at the proper rate, because new earnings may push you into a higher tax bracket.