Retirees Return to Work Working

Retirees Return to Work

Working After Retirement

When a retiree wants to return to work with the same company, but only as a temporary, part time company, that's a great opportunity for both employee and employer, but there are some stumbling blocks along the way that must be hurtled. One corporation has worked out a unique way for their former employees to come back in a creative strategy.

For example, the "Happy Returns" program at MidAmerican Energy Company is glad to welcome their employees who retired but wish to come back for temporary work assignments, and they have figured a way to avoid "hassles associated with government regulations regarding defined benefits pensions and employment by a former employer" (Ryberg, 2006). What retirees do when MidAmerican lets them know there is some part time work is actually sign up as temporary employees with Manpower, Inc., not with MidAmerican.

So, the retirees are then actually on Manpower's payroll, and the reason this is being done this way - and could be done by other companies luring retirees back to the fold - is because of federal regulations, Ryberg explains in the Des Moines Register (October 29, 2006). Indeed, federal law restricts how soon a retiree can return to a company he or she worked for previously, if that employee is receiving a "defined benefits pension," according to Natalie Bachman, benefits director for Principal Financial Group in Des Moines, whom Ryberg quotes.

Meanwhile, one employee who retired but comes back to work for MidAmerican is a so-called "snowbird" - he goes south during the cold Iowa winters and returns in the spring - is Ken Schwarz, 62. Schwartz, like about 30 other MidAmerican retirees who return to work part time (through Manpower), is paid "market rate" and feels good about staying connected with the company he worked for year after year most of his adult life. He was a department manager, and so he needs little or no training upon returning to work each summer (which he's done for the past 3 years).

Meanwhile, Alvin Rogers of Little Rock, Arkansas, worked for ABF Freight System for 30 years; Alvin retired when he turned 55; His wife Mary retired at 57 from Levi Strauss. They both got full pensions but they didn't have much savings, and like many older people (who are living longer than ever before). What savings they did have, they "...didn't want to draw off of to too quickly and let the money go down so fast..." that halfway through their retirement they were left without resources," said Mary Ann Campbell, a Certified Financial Planner quoted in www.todaysthv.com.People are outliving their resources, said Maria Reynolds-Diaz, the AARP state director in Arkansas. In fact, 22% of all retirees go back to work "for financial reasons," Reynolds-Diaz states. AARP recommends retirees save 65 to 85% of what they earned in their working years. But since the Rogers' didn't have that much saved, Mrs. Rogers has gone back to work part time with the East Little Rock Senior Center. What she brings home "takes care of my needs... [so] I don't have to go into the budget."

Still, the Rogers family did the smart thing, and talked to a reputable financial planner who now manages their investments, and so now they will be able to pay attention not only at investments, but Social Security, long-term care insurance, and the other important aspects of retirement.

An article in USA Today (Fetterman, 2005) profiles several retirees who went back to work, including Doreen Bellino of Woburn, Mass, who (in 2001) retired from a government contractor (Mitre) at the age of 58 (but she says now she's "not really retired-retired"). After working in Mitre in their human resources department for 25 years, and doing a good enough job to be missed, her bosses asked her to return as a consultant. The company was launching a new database, and they believed Doreen's experience would make her "someone with the memory of how things were done." She initially came out of retirement to work three days a week, but now she only works one day per week. Mitre in fact offers workers a phased-in retirement, with fewer hours and fewer workdays; but they keep a core of "reserves at the ready" like Doreen. Now Doreen has a little extra income so she won't have to dip into her nest egg, and the company doesn't have to worry that "it could lose too much institutional knowledge as its workforce retired," Fetterman explains.

In the same article, Joyce Montgomery of Detroit retired from her job as a counselor at a children's home, after her husband also retired. But soon they "...got tired of sitting around...I wanted to come into the workplace to be around people." So she applied for a part time job at CVS pharmacy, planning on perhaps ten or fifteen hours a week, but now, "she works full time," Fetterman reports. "They look at seniors like it's not a person who needs to work, so you can really depend on them because they like their work more," says Montgomery, 58 years old. This is not "a must," financially, she says, though her old job was.

Another article in USA Today the next day advised that retirees who aren't covered by their former employer's retirement plan might very well spend 20% to 30% of their retirement income on health care, albeit Medicare pays some of those costs. But for a 65-year-old couple retiring with no health care sponsored by their past employers will need an average of $190,000 to pay extra expenses for health insurance - a good reason why many retirees go back to work to pay for those high insurance costs.

Eighty-two-year-old Irving Strauss was forced to retire at 62 from an investor-relations company. "I had savings," he says in an article in Bankrate.com (Phipps, 2003), "we could have gotten along on that, but I wanted something better. I wanted to go out and make another $100,000 a year, so I did." Strauss, president of Strauss Corporate Communications in New York City, is not an exception in terms of what his motivations were in terms of returning to work, but he is perhaps an exception in the sense of how much he makes in "retirement."