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Working in Retirement – The Advantages

Posted By Dennis Damp On In ANNUITIES / ELIGIBILITY,BENEFITS / INSURANCE,EMPLOYMENT OPTIONS,FINANCE / TIP,RETIREMENT CONCERNS | Comments Disabled
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First, let me start off with a correction for the COLA article sent out last week. Here is the correct link to the table of all COLAs from 1999 to the present [2]. I generally release timely articles the day they are announced; in the rush I neglected to check the original link.

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There are many opportunities for retirees to work today and earn additional income and benefits. What makes federal retirees unique in many respects are their broad base skill sets and their ability to retire early, often in their 50s and younger. Those working in law enforcement, fire fighters, air traffic control, nuclear weapons couriers and others are able to retire with just 20 years of service. Early retirement programs also include mandatory retirement at a designated age or years of service. Plus, may feds have extensive work histories that bode well for future employers looking for a stable and knowledgeable workforce.

Today, almost every establishment you enter is hiring, many offering sign on bonus, flexible hours, and benefits. This hiring frenzy is across all occupational groups and it isn’t uncommon to negotiate starting salaries and work hours. Full and part time positions are available and many positions offer telecommuting. Millions have not returned to work for various reasons: child care, generous unemployment benefits, COVID vaccine and mask mandates, insufficient wages, and early retirements, to name a few. I was at a gas station today and half of the pumps were out of service, the attendant said they can’t get the parts and the company that repairs them can’t find employees, even though they pay $35 an hour to start.

There are many hidden benefits when returning to work after retiring. Your savings will last longer, it provides an outlet to get out and about at least part time during the week, many seek work to maintain a social outlet or to learn new skills.

Another primary reason to work in retirement is to increase your Social Security payments, over and above the annual COLA increase [4]. As long as you continue to work, even if you are receiving benefits, you will be paying Social Security taxes on earnings. Social Security will check your record every year to see whether the additional earnings you had will increase your monthly benefit. If there is an increase, they will send you a letter telling you of your new benefit amount.

It’s important to note that your federal retirement annuity will not be reduced no matter how much you make while working in the private sector. That isn’t the case if you return to federal service as a rehired annuitant [5], your annuity will remain the same, however in most cases your federal salary will be offset by the amount you are paid in your annuity each month.




A Social Security beneficiary between age 62 and their full retirement age [6] can earn up to $19,500 a year in 2022 without losing any of their Social Security benefit by working. This earnings limit is set each year and differ by age group. This limit is for beneficiaries under full retirement age. If you reach your full retirement age in 2022 the limit is $51,960/yr. After reaching full retirement age there is no limit to the amount of earnings and no loss of benefits.

If under full retirement age and earning more than the limit, $1 of benefits will be lost for each $2 of earnings over the limit. In the year you reach full retirement age and earning more than the limit, $1 of benefits will be lost for each $3 of earnings over the limit.

Wages received as an employee, and net earnings from self-employment, bonuses, commissions, fees, vacation pay, cash tips of $20 or more a month, severance pay, and earnings from all types of work count for the earnings test. Income from investments and rental property are not included and will not impact your Social Security payments at any age.

FERS retirees [7] are eligible for Social Security benefits, unlike their Civil Service Retirement System [8] (CSRS) counterparts. You must work 40 quarters, 10 years, in a job that pays social security taxes to qualify for a minimum benefit. CSRS employees did not pay social security taxes while working for the federal government, they contributed to their CSRS retirement system instead.

The only work that withheld Social Security contributions for me was my active-duty Air Force time, one year as a draftsman, and part time work as a teenager. Maybe 6 years, 24 quarters total. I accrued 28 years of substantial earning years when I applied for Social Security two years ago, mostly from my business that I started part time in 1985. I describe my early life including work experience in “The Early Years, A Road Less Traveled [9],” a memoir that was released last year.

This year my wife and I both received Social Security increases retroactive to the first of the year, and my benefit is no longer reduced by the Windfall Elimination Provision (WEP) [10] because I reached 30 years of substantial earnings covered by Social Security taxes. Social Security doesn’t receive the previous year’s income data from the IRS until midway through the new year. They increase your monthly checks going forward and send a check to make up for the increase for the previous months.

Typically, long term CSRS employees only have a handful of substantial earning years that contribute to the minimum 40 quarters required to collect a monthly social Security check.  Many CSRS retirees can earn enough in retirement to qualify for benefits. Just be aware that WEP will reduce your monthly check by as much as $498 in 2021.

Today, you can apply just about anywhere due to severe worker shortages nationwide. Federal workers with security clearances and recent retirees who had active security clearances can search thousands of high paying private sector clearance jobs [3] with defense employers and government contractors. Applicants will have the opportunity to support and secure complex government, defense, and intelligence projects worldwide.

Visit our jobs board [11] for featured private sector job listings. Because so many have dropped out of the workforce, retirees have ample opportunities to showcase the knowledge, skills, and abilities they learned while working for Uncle Sam.

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Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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