Be mindful of Social Security when starting a new job after retirement

MONEY POWER: Kiplinger's Personal FinanceApril 27, 2014 

When a new company took over the packaging company where Pat Baines was vice president and asked him to transfer from Charlotte, N.C., to California, he chose early retirement, at age 62. That early retirement, plus paying for his sons’ higher education and the effects of two subsequent bear markets, left Pat and his wife, Bonnie, seriously short on retirement savings.

Enter Baines’ second career, as a full-time mail carrier for the U.S. Postal Service. To bolster the couple’s savings, he shovels money into his pretax retirement account; they live off the rest of his pay, along with Social Security and a few modest pensions. Baines plans to retire for good in two years — when he turns 80.

Keeping the job you have is almost always easier than finding a new one, especially at age 66, says Tim Driver, of RetirementJobs.com, which lists jobs for people 50 and over. Still, some industries are waking up to the fact that many customers and clients prefer dealing with older workers. “The caregiver category is huge,” says Driver. “If you’re taking care of people in their eighties or nineties, you are typically rewarded for being a little older.” Other categories friendly to seniors include retail positions and driving gigs for, say, retirement communities.

Eager to leave your career job for one that makes the world a better place? Check out the section at RetirementJobs.com that lists jobs for nonprofits, including the Peace Corps. Encore.org, which encourages second careers with a social purpose, also posts nonprofit jobs, including those in health care, education, government and the environment. Most of these jobs are relatively low-paying; expect to do well but not to get rich.

With a new full-time position, you’ll have access to whatever benefits other full-time employees get, including health insurance. If you’re already enrolled in Medicare but have access to employer coverage that pays first, you can take it and drop Medicare parts B and D. You may re-enroll without penalty when you re-retire. If you have retiree coverage from a previous employer, ask the benefits administrator there what happens if you drop it while you work. Chances are, you’ll lose it forever.

With Social Security, you may have to backtrack. Say you retired six months ago and claimed benefits, then went back to work full-time and don’t need the extra income. You can undo your claiming decision by repaying the money, as long as you do so within a year of enrolling. Given the pluses of waiting until age 70 to collect benefits, “it’s almost always worth paying the money back,” says Rande Spiegelman, vice president of financial planning at the Schwab Center for Financial Research.

Jane Bennett Clark is a senior editor at Kiplinger’s Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit Kiplinger.com.

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