Retirees Find a Retirement Hack in Ride-Hailing
Retirees Turn to Ride-Hailing as a Retirement Hack
Retirees are finding a new way to supplement their income and stay active in their post-working lives: ride-hailing. For individuals like Mark McCann, a 64-year-old Lyft driver in Dallas, ride-hailing isn’t about making a fortune, but rather utilizing business tax deductions to maximize income while keeping taxable income in check. The ability to draw on Social Security benefits without penalty becomes a retiree’s retirement hack through ride-hailing.
Understanding the Tax Implications
When entering the gig economy, retirees need to be aware of the tax implications. Individuals drawing on Social Security before their full retirement age face limits on their taxable income. The more they earn above the annual limit, $22,320 in 2024, the more their Social Security benefits are reduced. By choosing ride-hailing as a part-time gig, retirees like Mark McCann can optimize their income to stay below the earnings limit.
Business Expense Deductions
Drivers can successfully reduce taxable incomes through business expense deductions. The most common method is tracking mileage for business use. As of 2024, drivers can deduct $0.67 per mile driven for business purposes. Other deductible expenses include tolls, car washes, and even snacks provided to passengers. Mark McCann, for instance, was able to significantly decrease his taxable income through deductions, making ride-hailing an effective supplement to his retirement.
Retirees and Taxes: A Winning Combination
By strategically utilizing business expense deductions, retirees like McCann can supplement their income while drawing Social Security without penalties. Choosing a part-time job in the gig economy can have financial advantages over traditional 9-to-5 jobs. The flexibility and independence are additional perks that come with this retirement hack.
Understanding the Tax Implications Before Entering the Gig Economy
Before deciding on a retirement gig, it’s crucial for retirees to fully understand the tax implications. Consulting a tax expert is highly recommended, as other streams of income can impact the taxation of Social Security benefits. By doing so, retirees can ensure they are maximizing their income while minimizing their tax liability.
Not Just About the Money
While the financial benefits are a significant aspect of ride-hailing as a retirement hack, Mark McCann points out that it’s not the only reason he chose this gig. For retirees who are missing the social interaction of their previous careers, ride-hailing provides an opportunity to meet interesting people from all walks of life. The ability to work when and where you want, be independent, continue receiving Social Security, and pay minimal taxes are the additional advantages he cited.
