If I Retire and Begin Receiving My Pension, Can I Still Work?
You thought were retired for good, but then realized you needed a little more cashflow just to make ends meet -- or perhaps you just got bored sitting around the house -- so you returned to the workforce. It happens all the time. But you really can't afford to lose your pension while you're back at work, particularly if it's a lower-wage, part-time gig. Or perhaps you've returned to your old job, or some version of it. What should you do? Can you work and collect your pension at the same time?
In most cases, the answer is yes, you may still work while receiving a pension if you have officially retired -- but with a few limitations. Since pensions are considered part of your compensation package, they generally may not be taken away for any reason. Some pensions are valued according to the rise and fall of the stock market, so it is not uncommon for a retiree to continue working after retirement in order to supplement a weaker-than-expected monthly check.
Who You Work For Matters
While you may continue to work for the same employer from which you have retired, it must be on a part-time or contract basis only (as opposed to full-time, which is typically, 40 hours per week). This is relatively common since employers can benefit from asking seasoned veterans for occasional help, while the retired employee may want extra spending money.
However, you may work full-time after retiring and collect a pension if it is with another employer. Some employees are offered early retirement incentives by companies looking to downsize, but may still have several years of work left in their careers. And no matter how much you earn from another job, your original pension payments are fixed and cannot be lowered.
If you are collecting Social Security benefits but have not yet reached full retirement age, your benefits may be reduced if you earn more than a certain amount annually. But after reaching full retirement age, there is no such limit on earnings. The limit was $14,640 in 2012.
It may also help to consider your pension payment options if you expect to be working after retirement. Some companies offer lump-sum pension payments instead of a monthly check, which may be helpful under certain circumstances. Otherwise, you will want to calculate your monthly expenditures and figure out your monthly benefit check before deciding whether to work while receiving a pension.
Consider Getting Legal Help from an ERISA Attorney
Being adequately prepared for retirement is a big deal. After all, you worked hard all your life and now -- having entered your golden years -- the last thing you want to do is worry about paying the rent or putting food on the table. So if you have any doubts with respect to collecting pension while continuing to work, you may want to speak with an ERISA attorney for more help.