Got Your Gold Watch? Now Get a Job

For many, it makes sense to stay in the workforce

After making a bundle and retiring at 55, Henry Hirsch set out one morning to develop a routine for the years ahead. He had spread out his papers on the kitchen table and was placing phone calls when his wife came in and said, ”You’re taking up my space. That’s where I sit in the morning.”

”That’s when I said to myself, ‘You know, maybe I should go back to work,”’ says Hirsch. So six months after retiring as vice-chairman and chief executive at Williams Telecommunications Group in May, 1997, he answered a headhunter’s call and became chairman and CEO of Bellevue (Wash.)-based startup Advanced Radio Telecom. Now, he’s working 65 hours a week. Says Hirsch: ”I’m back in the race.”

Hirsch’s story may be extreme, but more and more retirees are deciding that they’re not ready for full-time leisure. A survey this year by the Employee Benefit Research Institute found that 68% of workers expect to work for pay after retiring, up from 61% who said so in 1998. True, some of the people who plan on working actually won’t. Still, economist Joseph Quinn of Boston College calculates that at a minimum, about one-third of men and nearly one-half of women will take bridge jobs after their last career job and before completely retiring.

Indeed, it’s hard to tell whether some folks are really retired at all. ”A growing number of people just don’t buy into the traditional notion of retirement,” says David Yeske, a certified financial planner in San Francisco. Instead of preparing his clients for full retirement, says Yeske, ”I tell them to accumulate enough capital so that they’re able to work by choice, not necessity. People can buy into that.”

If you want to work after retirement, it pays to plan ahead. Talk to your current boss about opportunities, and start networking among business associates for leads. By not planning, you could slide into a job that is less than ideal. And you could end up paying more taxes than necessary, as well.

What kind of work do you want to do? A sensible choice is to keep doing what you have done before. If you’re the adventurous type, however, retirement can be a good time to try something different. The right decision boils down to your temperament and the options available.

SOCIALLY SECURE. The fading dividing line between work and retirement raises important financial planning issues. When should you start drawing Social Security, pension, or 401(k) benefits? The first step, planners say, is to calculate your cash-flow needs. Then figure out how a job will change your cash income.

Don’t forget that your Social Security benefits are reduced if you work. Under age 65, you lose $1 in benefits for every $2 in earnings above $9,600. From age 65 to 69, you lose $1 in benefits for every $3 in earnings above $15,500. But the thresholds are rising. By 2002, recipients of Social Security age 65 to 69 will be able to earn $30,000 a year without losing any benefits. If you’re 70 or over, you’re in luck: Even today you can earn as much as you want with no loss of Social Security benefits.

Working should make it more affordable to delay when you start taking Social Security benefits, and that can be a good thing. It used to be that your annual benefits would rise only 3% for each year past age 65 that you delayed starting to draw them. But the Social Security Administration is gradually raising that credit, so by 2009, it will be 8% per year of delay. If you expect to live a longer-than-average life and you can afford to do without Social Security for a while, it will pay to wait.

TEMP JOBS. For retirees in their 50s, a bridge job can be a smart alternative to tapping your pension early. Dipping into a pension in your 50s will leave you with less later on. And early pension withdrawals are hard to stop if circumstances change and you don’t need the money. Here’s why: The only way to get early payouts from your pension without paying a 10% penalty is to commit to a schedule of equal-size payouts. If you then go back to work and don’t need the payouts, you have to take them anyway for five years or until age 59 1/2, whichever comes last. For that reason, ”it’s critical for you to decide up front whether you’re going back to work or not,” says Maureen Tsu, a certified financial planner in San Juan Capistrano, Calif.

Some retirees who go back to work enjoy the security and esprit de corps that come with a permanent job. Peter Andrews, 63, a technical writer in Raleigh, N.C., who took early retirement from IBM, did seven years of temp work before landing a permanent job this June at Square D, a manufacturer of electrical equipment. ”I feel more part of a team now,” says Andrews. ”I’m doing exactly the same work I did a month ago, but now it means more to me.”

However, many working retirees prefer part-time or temporary work. Luckily, those are the kinds of jobs Corporate America is producing a lot of these days, says John Challenger, CEO of the Chicago-based outplacement firm of Challenger, Gray & Christmas.

Temporary-help agencies can be an excellent place to turn. They don’t supply just clerical jobs anymore. Such companies as Manpower and Kelly Services can place people in engineering, software, and other technical fields at rates of up to $50 an hour. Temp firms also provide training, skills assessment, and medical benefits–the latter a key concern for retirees who have not reached the Medicare-qualifying age of 65. Manpower estimates that a quarter of its temporary workers are 50 or over.

PC FOR DUMMIES. The rap on retirees is that they can’t handle technology–and sometimes that’s true. Tom Buck, 82, of Evanston, Ill., uses a 1930 Underwood typewriter to write features for a Blue Cross & Blue Shield of Illinois newsletter. Says the Chicago Tribune veteran: ”I’m sitting here with a beautiful computer at my desk, and I don’t know how to use it.”

O.K., Tom, but don’t assume that computers are beyond your grasp. Take Scott Bird, 74, of Scottsdale, Ariz. Bird also was a clueless newbie when he retired. Now, he is a certified trainer in Microsoft’s Windows NT 4.0 operating system.

Today’s booming economy desperately needs seasoned workers. By answering the call, you can keep your mind sharp, your wallet fat–and still find time for golf.