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Double dipping
Old 05-01-2008, 11:39 AM   #1
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Double dipping

The industry I work in is facing a crisis in the next 5 to 10 years due to the aging work force. Some occupations will have 25% to 30% of the present work force eligible to ER in that time (including me ) This will likely create a lot of "retire/rehire" situations where workers can take their pensions, then come back as a contractor for either their former employer or another company thereby earning a hefty income with pension + retiree medical + contract income. Has anyone here done this? If so, how did it work out for you and what kind of pitfalls does one need to be aware of?
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Old 05-01-2008, 04:19 PM   #2
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I haven't done this, but I did have someone working for me who did. She did check everything out before "retiring," to make sure she wouldn't lose any benefits and her husband would have coverage until he reached medicare age. She seemed to do well and was happy with the double dipping. The only pitfall I can think of was taxes because of the higher income, but that took care of itself. The only other pitfall I can see is if it's contract work, you'll be paying both portions of SS taxes.
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Old 05-01-2008, 07:29 PM   #3
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I did. Sweet deal. "Retired" Dec 06 and two weeks later started as per diem worker for another company doing same function from which I retired. Took pension and 401K as roll-over to IRA except for enough cash in 401 to bridge to 59.5 to avoid 72t. Still working per diem at higher compensation than when I retired. Since per diem, company takes care of all the deductions and gives me net pay every two weeks. No impact on retiree health care and pension was lump sum I will manage. Getting ready to hang it up again though. Wife retired and now I want to try retiree life style she enjoys.
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Old 05-01-2008, 07:37 PM   #4
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Hank

Did you see this article?

Pitfalls-of-Working-Past-Retirement-Age: Personal Finance News from Yahoo! Finance

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Old 05-01-2008, 08:25 PM   #5
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Go back to the same crap I left?

I'd rather sell a kidney.
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Old 05-01-2008, 08:43 PM   #6
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A fair number of people do this. Most common with retired military and some govt retirees. It can be a good financial deal but it certainly is not retirement. One coworker retired from federal service and then worked for the state for 5 years to pick up that retirement. Now he is back as a contractor. He doesn't need the money but just needs to be away from the wife. Sad really.
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Old 05-01-2008, 09:25 PM   #7
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Quote:
Originally Posted by Rambler View Post
Yes, I have read that one. The idea wouldn't be to work past my estimated ER date. Just curious if a double income strategy to earn extra during those last few years would result in a larger nest egg. I guess if one tried it and didn't like it, you could give notice and bail out.
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Old 05-01-2008, 09:41 PM   #8
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The industry I work in is facing a crisis in the next 5 to 10 years due to the aging work force. Some occupations will have 25% to 30% of the present work force eligible to ER in that time (including me ) This will likely create a lot of "retire/rehire" situations where workers can take their pensions, then come back as a contractor for either their former employer or another company thereby earning a hefty income with pension + retiree medical + contract income. Has anyone here done this? If so, how did it work out for you and what kind of pitfalls does one need to be aware of?
I was offered an early retirement buyout with heath benefits last year. Incredible deal. Before I accepted I had already landed a job in a spinoff of my old company, so the decision was really easy.

Another sweet part of the deal is because I decline health insurance from my new employer, they give me a credit in my pay. On top of that, because I was considered a senior employee because of experience with the company before the spinoff, I get 6 weeks of vacation per year. Not too bad...

Pitfalls? I can't think of very many, except that I miss some of the people I worked with and I had to re-establish my reputation. And you still have to decide about the right timing for actual retirement, something I haven't done yet.

Would I do it again? Absolutely!

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