It is no secret that more Americans are working past retirement age. And as economy pressures mount, the decision to remain in the workforce might be less about choice and more about necessity.
Social Security
Without understanding where the financial time bombs lie, many older workers could find their Social Security payments reduced. Those who retire and draw Social Security before 65 years old (or later, depending on your birth year) and then return to work face benefit reductions when taxable earnings top $13,560 a year. Benefits are docked $1 for every $2 of income earned if you are under your full retirement age. The only thing to do is abstain from drawing Social Security benefits until full retirement age.
Medicare Coverage
You are eligible for Medicare and over 65, but if you continue to work for an employer that offers medical insurance, Medicare coverage and supplements won't be available to you since your employer is required to insure you.
"This policy is a tremendous disincentive for companies to hire older workers, because they end up paying the full cost of medical bills," says Anna Rappaport, an actuary and retirement strategy consultant and senior fellow at the Conference Board.
Continuation of retiree medical benefits that some companies offer could be lost if you go back to work, and you could end up losing this coverage when you retire for good. That is why you need to investigate your company's retiree-benefits policy before you agree to come back to work.
Source: The Wall Street Journal, April 29,2008
Subscribe to this blog
