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If I Retire and Begin Receiving My Pension, Can I Still Work?

If I Retire and Begin Receiving My Pension, Can I Still Work?

You thought were retired for good, but then realized you needed a little more cashflow just to make ends meet—so you returned to the workforce. It happens all the time. But you really can't afford to lose your pension while you're back at work, particularly if it's a lower-wage, part-time gig. Or perhaps you've returned to your old job, or some version of it. What should you do? Can you work and collect your pension at the same time?

In most cases, the answer is yes, you may still work while receiving a pension—but with a few limitations. Since pensions are considered part of your compensation package, they generally may not be taken away for any reason. Some pensions are valued according to the rise and fall of the stock market, so it's not uncommon for a retiree to continue working after retirement to supplement a weaker-than-expected monthly check.

This article covers the basics of working a job after retirement and the collection of pension benefits. See FAQ: Pension Plans and ERISA and Types of Retirement Plans for additional information.

Who You Work for Matters

It's relatively common for a recently retired person to return to work for a former employer in cases where that employer provided the employee with a pension. After all, employers can benefit from asking seasoned veterans for occasional help, while the retired employee may want extra spending money.

Whatever the case may be, it's important to review your pension plan. Plans can be very different from one employer to the next, and the decision you make concerning your return to work could impact your pension in an undesirable way.

For example, if you work for your former employer on a full-time equivalent (FTE) basis, your pension payments may stop. So, it may be best to work on a part-time basis because many part-time/contractor positions will not affect your pension. Also, whether you return to work may affect planned increases in your payments when do you retire.

But it's also possible that you may work full-time after retiring and still collect a pension if your full-time work is with an employer other than your former one. Some employees are offered early retirement incentives by companies looking to downsize, while such employees may still have several years of work left in their careers. And no matter how much you earn from another job, your original pension payments are fixed and cannot be lowered.

Can Returning to Work Affect Your Social Security Benefits?

Yes. Going back to work can affect your social security benefits.

For example, if you are collecting social security but have not yet reached full retirement age, your benefits may be reduced if you earn more than a certain amount annually. But after reaching full retirement age, there is no such limit on earnings.

The Social Security Administration (SSA) reviews your age and income when determining if it will reduce your payments. For example, if you are younger than the retirement age and make more than the limit, your SSA benefits will be reduced. And if you are under retirement age, SSA will deduct $1 for every $2 you make over the annual limit. In 2022, that limit has been set at $19,560. However, when determining how much you make each month or annually, the Administration does not count pension benefits.

As you consider returning to work, also note that some companies offer lump-sum pension payments instead of a monthly check, which may be helpful under certain circumstances. Otherwise, you will want to calculate your monthly expenditures so that you can figure out your monthly benefit check before deciding whether to work while receiving a pension.

Get Legal Help with Your Pension Questions

Being adequately prepared for retirement is a big deal. After all, you worked hard all your life and now—having entered your golden years—the last thing you want to do is worry about paying rent or putting food on the table. So, if you have any doubts with respect to collecting your pension while continuing to work, you may want to speak with an experienced employment attorney near you today.

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