Implications of working in retirement

“Education has been my whole life, 1944 until the present, first as a student, then teacher, parent, grandparent, librarian,” said Jane Jackson, a retired teacher from Galena, Ohio.

Although she retired from teaching in 1996, she was not ready to remove herself from the educational system, so she got another job with the school district as a library assistant.

“I love it,” Jackson told us. “No hassle with lessons or curriculum requirements, no recess duty. I read stories to the kids, check books in and out and supervise a study hall.”

Jackson, 67, plans to continue working at least five more years until her youngest grandchild graduates from high school. Aside from enjoying her work, her salary “is a nice supplement” to her state teacher pension, she said.

Another reader, a certified public accountant in Raleigh, N.C., will be able to retire while still in his 50s at the end of next year. Wisely, he is not waiting until then to think through what he will want his retirement days to be like.

“Through 2007 I will research and develop a ‘first two years’ plan for retirement,” he said, one that includes part-time work, travel, volunteering and some flexible time to do as he wishes.

“Yes,” he told us, “I guess I want it all.”

And why shouldn’t we, if we take the time to plan for it, including understanding ourselves, and have the foresight and discipline to save? While not actually needing the money from post-retirement work, the accountant says, “I will admit the extra income will afford some things. But the important part is the social contact. I look forward to meeting new people in a business environment.”

A desire for money and/or social contact explains why many retirees are returning to the workforce, at least part time. A survey by Zogby International for the MetLife Mature Market Institute this year found that about 11 percent of retirees ages 55 to 59 had gone back to work, as had 16 percent of those between 60 and 65 and 19 percent of those between 66 and 70.

Regardless of the reason - because they are having trouble making ends meet, are bored or want to follow a passion - anyone working or planning to work in retirement needs to review the financial implications of the decision. Here are useful tips from the Financial Planning Association, the largest membership organization of financial planners in the United States.

  • Determine how much money you’ll be satisfied making in your post-retirement work.
  • Consider how a return to the workplace will affect you personally and socially: If you are still employed full time, working right now probably feels like breathing, part of the everyday routine.
  • Consider the impact that any work-related income will have on your tax bill. Many retirees find it doesn’t take much post-retirement, work-related income to push them into a higher bracket.
  • Look for work-related incentives. Particularly for retired state workers, such as Jackson the librarian, there are opportunities to return to state employment and augment existing pensions.
  • Consider insurance issues. Retirees returning to the workforce who are already eligible for Medicare or are covered by a Medigap policy may be able to lower their costs or improve their coverage by accepting group coverage from their employer as the primary underwriter of their medical expenses.

Humberto and Georgina Cruz are a husband-and-wife writing team who work together in this column. Send questions and comments to or