"If we don't change, we don't grow. If we don't grow, we aren't really living,"
- Gail Sheehy, author of "Passages" and 16 other books.
RULES: Working while collecting Social Security benefits:
Full retirement age for Social Security is 66 for people born in 1943 to 1954 and will gradually increase to 67 for people born in 1960 or later. But Social Security allows people to begin taking benefits with a lower payout at age 62.
If you are under full retirement age but start collecting benefits and continue to work, Social Security will deduct $1 from your benefit payments for every $2 you earn above the annual limit of $17,040 (2018 limit). (For more, visit www.ssa.gov) In the year you reach full retirement age, $1 in benefits is deducted for every $3 you earn above $41,880 this year. That’s only for the months before you reach full retirement age. Once you reach full retirement age, you can collect benefits without deductions even if you’re working full-time. Even better, if you keep working and don’t take benefits, your benefits will increase 8 percent for every year you wait, up to age 70.
BY JULIA ANDERSON
Jean Morris likes her job, likes her clients and could never think of a reason to stop working even though she is well over full retirement age. “The incentives for working are many fold,” said Morris, 74, who is a financial adviser for iQ Credit Union in Vancouver, Wash.
With 44 years of experience in the financial services arena, Morris said she likes her employer and finds her job rewarding. “When people ask me when I’m going to retire, I give them my pat answer…in eight more years. I’ve been saying that for quite a long time,” she said.
Morris is among a growing number of older Americans who are working full- or part-time even though they are at retirement age. For some it’s a financial necessity and helps stretch their savings. For others, working brings stimulation and social rewards.
According to the U.S. Census Bureau, workplace participation by Americans 65 and older has reached 22.1 percent for men and 13.8 percent for women, up from 17.7 percent and 9.4 percent in 2000. Increased life expectancy, a rising “full” retirement age as determined by Social Security and a shift away from defined benefit pension plans all are factors, the Census Bureau said.
Experts say that workers at age 65 should have saved seven times their current salary for retirement. For example, if you’re earning $65,000 a year, you should at least have $455,000 stashed in a 401(k) tax-deferred retirement plan. Many people have not achieved that goal, which means working in retirement is a requirement.
“Increased cash flow is an obvious incentive,” Patsy Eby, a Vancouver CPA, said. “Professionals who have expertise in management or sales…accountants who only work during tax season are good candidates for working part-time in retirement. Some people like to keep an active mind. Retirement can be isolating,” Eby said.
Eby’s advice: Keep working and hold off on collecting Social Security benefits as long as possible. “It’s a gamble, but you get more money, if you wait,” she said.
Fear of running out
Many, especially women, who are approaching retirement, have a fear of running out of money in their later years, even if they’ve saved a substantial nest egg. With concerns about the economy, a rising cost of living and swings in stock markets, many may feel that staying on the job or taking part-time work is a good way to go.
Experts recommend retiring in phases. Ken Dychtwald, CEO of Age Wave, a research think tank on aging, suggests:
- Do your retirement home work. Give your retirement a new beginning and a new purpose. Talk to your partner, your friends. Sign up for work shops.
- Make a list of things you have always wanted to do. Rank them and evaluate what’s possible.
- Get fit. Make your health a priority.
- Schedule a face-to-face meeting at your local Social Security office to find out what your benefit options are. Then meet with a financial planner to decide if you can cut back on work without taking Social Security benefits.
- Come up with a new structure for your days…volunteering, church, part-time work.
- Get a new job. It may be something you’ve never done before but keeps your life productive.
Steve Pierce, who lives in Tacoma, Wash., has three “jobs” and one volunteer commitment in retirement.
Since leaving full-time work as communications director of the Washington state Department of Transportation, Pierce, 66, is filling his days by teaching piano lessons, doing yard work for neighbors and driving for the Department of Services for the Blind. He also volunteers for the local Humane Society.
His advice: Don’t wait until retirement to plan your retirement.
Using as a resource the New York Times best seller, “Younger Next Year,” by Chris Crowley, Pierce identified passions that he’s had for a long time.
“I’ve played the piano since grade school and decided to take on my granddaughter as a student,” he said. “Now I have four students. It’s a joy to see them learn.”
By driving for the blind, he’s formed new rewarding friendships. As a driver, he works for the local Department of Services for the Blind Office, which pays $15 an hour for his time.
“I like yard work so I began doing yard work is for neighbors for which I’m paid or in one case, I trade work for a weekend at their beach house.”
The money, he said, is secondary to the rewarding experiences.
“Money can’t be the focus, but if you’re passionate about certain things you might be surprised that there’s a revenue stream from it,” Pierce said.
In his book, “The Confident Retirement,” author Ron Kelemen observes that “some people view retirement as a solution to their unhappiness at work. They are running away from something instead of to something.”
He suggests making a list of what you like and what you don’t like about your job. Then he recommends (if possible) changing your work situation so that it is more sustainable and enjoyable. Kelemen, an Oregon-based financial adviser, has seen clients develop a new attitude toward their work by tweaking the job they have. Thus, delaying real job loss.
“And, of course, their retirement became more financially secure as a nice side benefit,” he said.
Clueless in retirement
Many people are totally wrapped up in an all-consuming job and are clueless about what they might do with their time if they leave that job. Planning the final third of your life might take work and will likely evolve over time.
“People who retire may need to pull some layers away to get at what they might find rewarding, Pierce said.
Both Morris and Pierce advise those who want to work full- or part-time in retirement to do their homework for what makes sense both financially and emotionally.
“I know a retired school principal who now works at a hardware store because he gets to talk to people all day,” Morris said. In her job, Morris estimates that she manages about 600 clients and handles 60 or more phone calls in an average week.“I don’t consider this working in retirement but just working,” she said.
Pierce left his state job with the full knowledge that he would find a new life in retirement.
“My advice is not to wait but start thinking ahead about what you’re passionate about and whether there’s a way to make some money doing it,” he said.
HELPFUL WEB SITES:
“Younger Next Year,” by Chris Crowley
“The Confident Retirement Journey,” by Ron Kelemen.
“Roadmap for the Rest of Your life,” by Bart Astor
“Can I Retire?” by Mike Piper, CPA
“How to Retire Happy,” by Stan Hinden
“Working After Retirement for Dummies,” by Lita Epstein
I meet women all the time who face job and money transitions and who want to do them right. It’s about building confidence and taking charge of the future. This is your money. No one cares more than you do!
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