Working After Retirement For Dummies PDF
Preview Working After Retirement For Dummies
01_087909 ffirs.qxp 12/26/06 6:36 PM Page iii Working After Retirement FOR DUMmIES ‰ by Lita Epstein 01_087909 ffirs.qxp 12/26/06 6:36 PM Page iv Working After RetirementFor Dummies® Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2007 by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. 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Library of Congress Control Number: 2006939528 ISBN: 978-0-470-08790-9 Manufactured in the United States of America 10 9 8 7 6 5 4 3 2 1 01_087909 ffirs.qxp 12/26/06 6:36 PM Page v About the Author Lita Epstein,MBA, excels at translating complex financial topics critical to people’s everyday life. She enjoys helping people develop good financial, investing, and tax-planning skills. She designs and teaches online courses on topics such as investing for retirement, getting ready for tax time, and finance and investing for women. Lita lives in a 55-plus community in Florida and works (and plays) with many people who moved there after retirement, but for various reasons have gone back to work. Some because they were bored, but many because their money just isn’t going as far as they thought. Others have gone back to work to get access to group health insurance, because it is just too expensive to buy on an individual basis. Lita has over a dozen books on the market, including Streetwise Crash Course MBA, Streetwise Retirement Planning,andAlpha Teach Yourself Retirement Planning in 24 Hours, as well as books on Social Security and Medicare. Lita also is a faculty member in the College of Graduate Business and Management at the University of Phoenix. She was the content director for the financial services Web site, MostChoice.com, and managed the Web site Investing for Women. She also wrote TipWorld’s Mutual Fund Tip of the Day in addition to columns about mutual fund trends for numerous Web sites. 01_087909 ffirs.qxp 12/26/06 6:36 PM Page vii Author’s Acknowledgments Many people were involved in making this book a reality. First, a special thank you to Tracy Boggier, my acquisitions editor at Wiley, who successfully championed this book through the editorial board process. Also at Wiley, a special thanks to Jennifer Connolly, my project editor, whose helpful and insightful comments, as well as her expert editing, helped make this book the best it could be. In addition, I want to thank my agent, Jessica Faust, who helps me regularly with all my book projects. And finally, last but not least, my husband, H.G. Wolpin, who puts up with all my craziness as I try to meet deadlines. 01_087909 ffirs.qxp 12/26/06 6:36 PM Page viii Publisher’s Acknowledgments We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/. Some of the people who helped bring this book to market include the following: Acquisitions, Editorial, and Composition Services Media Development Project Coordinator: Erin Smith Project Editor: Jennifer Connolly Layout and Graphics: Carl Byers, Acquisitions Editor: Tracy Boggier Joyce Haughey, Shane Johnson, Stephanie D. Jumper, Barry Offringa, Copy Editor: Jennifer Connolly Laura Pence Technical Editor: Rob Moritz Anniversary Logo Design:Richard Pacifico Editorial Manager: Michelle Hacker Proofreaders: Melanie Hoffman, Editorial Supervisor:Carmen Krikorian Charles Spencer, Techbooks Editorial Assistant:Erin Calligan, Joe Niesen, Indexer: Techbooks David Lutton, and Leann Harney Cover Photos:© Comstock Images Cartoons: Rich Tennant (www.the5thwave.com) Publishing and Editorial for Consumer Dummies Diane Graves Steele, Vice President and Publisher, Consumer Dummies Joyce Pepple, Acquisitions Director, Consumer Dummies Kristin A. Cocks, Product Development Director, Consumer Dummies Michael Spring, Vice President and Publisher, Travel Kelly Regan,Editorial Director, Travel Publishing for Technology Dummies Andy Cummings,Vice President and Publisher, Dummies Technology/General User Composition Services Gerry Fahey,Vice President of Production Services Debbie Stailey,Director of Composition Services 02_087909 ftoc.qxp 12/26/06 6:37 PM Page ix Contents at a Glance Introduction.................................................................1 Part I: Getting Ready to Retire . . . Not! ........................7 Chapter 1: The World of Work After Retirement............................................................9 Chapter 2: Why You May Need or Want to Go Back to Work......................................19 Chapter 3: Assessing Your Talents for Your Next Job.................................................31 Chapter 4: Seeking Help to Determine What You’d Like to Do Next..........................41 Part II: Your Wallet to Your Health: The 411 When You Re-Enter the Workforce ...............................55 Chapter 5: Getting a Grasp on Managing What You Saved for Retirement...............57 Chapter 6: Managing Your Money So It Doesn’t Run Out............................................77 Chapter 7: Collecting Social Security and Going Back to Work..................................93 Chapter 8: Delaying Social Security and Working......................................................109 Chapter 9: Trying to Stay Healthy — Before Age 65..................................................125 Chapter 10: Exploring Medicare’s Maze of Benefits...................................................139 Part III: Finding Your Next Job..................................163 Chapter 11: Rebuilding Your Job Search Skills...........................................................165 Chapter 12: Surviving the Interview — Especially Those Tough Questions..........179 Chapter 13: Overcoming Myths About Older Workers During Your Job Search....193 Chapter 14: Working 9 to 5 or Not! Exploring Your Hourly Options........................201 Part IV: Revisiting Your Former Career or Starting Your Own Business...................................217 Chapter 15: Staying on the Job Part-Time...................................................................219 Chapter 16: Consulting for Your Former Company....................................................233 Chapter 17: Consulting in Your Former Industry.......................................................245 Chapter 18: Buying or Starting Your Own Business or Franchise............................261 Part V: Knowledge to Philanthropy: Opportunities to Broaden the Mind and More...................................287 Chapter 19: Going Back to College: Expanding Your Knowledge and Skills...........289 Chapter 20: Volunteering in the Business and Community World...........................303 02_087909 ftoc.qxp 12/26/06 6:37 PM Page x Part VI: The Part of Tens...........................................323 Chapter 21: Top Ten Companies to Work for in Retirement.....................................325 Chapter 22: Top Ten Skills for Running Your Own Business.....................................331 Chapter 23: Ten (Almost) Great Volunteering Experiences to Take Advantage Of..................................................................................................337 Index.......................................................................341 02_087909 ftoc.qxp 12/26/06 6:37 PM Page xi Table of Contents Introduction..................................................................1 About This Book...............................................................................................2 Foolish Assumptions.......................................................................................2 What You’re Not to Read.................................................................................3 How This Book Is Organized...........................................................................3 Part I: Getting Ready to Retire . . . Not!................................................3 Part II: Your Wallet to Your Health: The 411 When You Re-Enter the Workforce...................................................3 Part III: Finding Your Next Job..............................................................4 Part IV: Revisiting Your Former Career or Starting Your Own Business.........................................................4 Part V: Knowledge to Philanthropy: Opportunities to Broaden the Mind and More.........................................................4 Part VI: The Part of Tens.......................................................................4 Icons Used in This Book..................................................................................5 Where to Go from Here....................................................................................5 Part I: Getting Ready to Retire . . . Not!.........................7 Chapter 1: The World of Work After Retirement . . . . . . . . . . . . . . . . . . .9 Making that Critical Decision — Stay Retired or Go Back to Work...........9 Needing or wanting to work................................................................10 Assessing your talents.........................................................................11 Figuring out what you want to do......................................................11 Managing Your Money and Your Health......................................................12 Taking inventory on what you have...................................................12 Keeping yourself solvent.....................................................................12 Sorting out the rules of Social Security and work............................13 Staying healthy with and without Medicare.....................................14 Going Job Hunting..........................................................................................14 Working Less Than Full Time.......................................................................15 Revisiting Your Past or Starting Your Own Business.................................15 Working for your company — again..................................................16 Following your dream of owning your own business......................16 Expanding Your Horizons..............................................................................17 02_087909 ftoc.qxp 12/26/06 6:37 PM Page xii xii Working After Retirement For Dummies Chapter 2: Why You May Need or Want to Go Back to Work . . . . . . .19 Facing the Financial Facts.............................................................................19 Lost nest egg.........................................................................................20 Reduced pension payments................................................................23 Didn’t save enough...............................................................................24 Maintaining Your Lifestyle in Retirement....................................................25 Budgeting for specific phases of retirement.....................................25 Knowing what to budget for...............................................................26 Losing Professional Contact . . . or Just Getting Bored.............................28 Keeping your professional network alive..........................................28 Finding a new network of retired professionals...............................29 Going back to school...........................................................................29 Teaching others in your field..............................................................30 Chapter 3: Assessing Your Talents for Your Next Job . . . . . . . . . . . . .31 Determining Your Strengths and Weaknesses............................................31 Assessing Your Last Job................................................................................32 Uncovering Your Worker Type.....................................................................33 Determining your working type..........................................................33 Understanding your worker type.......................................................35 Using How You Like to Work to Find the Ideal Job....................................38 Working autonomously........................................................................38 Needing direction.................................................................................38 Working in teams..................................................................................39 Applying Your Skill Sets.................................................................................39 Carving Out Your Creative Talents..............................................................40 Chapter 4: Seeking Help to Determine What You’d Like to Do Next . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Talking with Someone One on One..............................................................41 Seeing the need for a career counselor.............................................41 Finding a career counselor..................................................................42 Determining what to talk about..........................................................44 Testing Your Values, Interests, Personality, and Skills..............................45 Exploring your values..........................................................................45 Determining your interests.................................................................46 Taking personality tests......................................................................47 Taking skills assessments....................................................................48 Networking with others.......................................................................48 How to build your network.................................................................49 Online job networks for seniors.........................................................50 Joining a Support Group...............................................................................52 Uncovering how support groups work..............................................52 Finding support groups near you.......................................................54 02_087909 ftoc.qxp 12/26/06 6:37 PM Page xiii xiii Table of Contents Part II: Your Wallet to Your Health: The 411 When You Re-Enter the Workforce................................55 Chapter 5: Getting a Grasp on Managing What You Saved for Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Exploring Your Retirement Accounts..........................................................57 Defined contributions versus defined benefits................................58 Pensions (defined-benefit plan).........................................................58 Employer savings plans (defined-contribution plans)....................62 IRAs........................................................................................................64 Taking Out Your Money — the Official Rules.............................................66 When you must start to draw money................................................66 How much you must withdraw...........................................................68 Investing the Money You Have.....................................................................71 Avoiding common mistakes................................................................71 Allocating your investments...............................................................72 Changing your strategies as you age.................................................75 Chapter 6: Managing Your Money So It Doesn’t Run Out . . . . . . . . . . .77 Determining Your Budget..............................................................................77 Budgeting for each phase of retirement............................................78 Accounting for everything..................................................................78 Developing a retirement budget.........................................................82 Planning Your Withdrawal Strategies..........................................................82 Tracking everything.............................................................................83 Exploring what you have.....................................................................84 Allocating Your Assets and Withdrawing Safely........................................87 Checking out the chart........................................................................87 Following an example..........................................................................89 Calculating Whether Your Income Is Enough.............................................90 Dealing with Taxes.........................................................................................91 Taxation of your pensions...................................................................91 Taxation of your retirement savings..................................................92 Chapter 7: Collecting Social Security and Going Back to Work . . . .93 Working and Collecting.................................................................................93 Following the rules...............................................................................93 Figuring benefits if you retire early....................................................94 Impacting Your Current Benefits by Going Back to Work.........................96 Understanding the Retired Earnings Test (RET) basics..................96 Reviewing the rules..............................................................................97 Calculating how much you can lose..................................................98 Getting special treatment in your first year of retirement..............99
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