800-822-1190
A+ Rated Company by the Better Business Bureau
Retirees Find Alternatives to Going Back To Work
According to a report by the Employee Benefit Research Institute, 37 percent of retirees report having to go back to work after retirement. This is up from 27 percent in 2006. Finances were identified as one of the primary reasons.
When you factor in retirees unable to go back to work due to a health-related problem or caring for a spouse, the percent is much higher.
For some retirees, going back to work is more a matter of wanting to stay active and productive. For others, it is a financial necessity. In either case, there are financial consequences to consider:
- It can decrease the benefit amount from Social Security for those who have begun receiving Social Security and have not yet reached the “full retirement age” (65 to 67, depending on when you were born).
- There is no change in the benefit amount from Social Security for those who have reached “full retirement age.”
It is a good idea to check with the Social Security Administration before deciding to go back to work. They provide an online benefit calculator and useful information on their website www.socialsecurity.gov/retire2/whileworking.htm. You can also reach them at 800-772-1213.
Other important considerations include a possible increase in your tax obligation and work-related expenses. Social Security benefits received at any age become partially taxable once your income exceeds a certain level (the specific amount is adjusted annually). Also, you have the expense of commuting to and from work. With the rising cost in gas prices, this may make going back to work cost-prohibitive.
An alternative for many retirees faced with having to go back to work is to take out a HECM, which enables homeowners 62 and older to convert the equity in their home into a lump-sum payment, monthly income, a line of credit, or a combination. No repayment is required for as long as you occupy your home as your primary residence.
“Funds from a HECM do not affect Social Security or Medicare benefits,”
The money from a HECM is tax-free because it is not considered income.
As a retirement tool, the HECM is growing in popularity. The Department of Housing and Urban Development (HUD) reports that 9,112 HECM's were endorsed in May 2008. This brings the year-to-date total to 73,875, a 3.3 percent increase over 2007.
For retirees who are not able, or do not enjoy the prospect of having to go back to work, a HECM may just be the answer.
