New Jobs and Health Care After An Early Retirement

When a new company took over the packaging company where Pat Baines was vice president and asked him to transfer from Charlotte, N.C., to California, he chose early retirement, at age 62. That early retirement, plus paying for his sons’ higher education and the effects of two subsequent bear markets, left Pat and his wife, Bonnie, seriously short on retirement savings.

Enter Baines’ second career, as a full-time mail carrier for the U.S. Postal Service. To bolster the couple’s savings, he shovels money into his pretax retirement account; they live off the rest of his pay, along with Social Security and a few modest pensions. Baines plans to retire for good in two years – when he turns 80.

Keeping the job you have is almost always easier than finding a new one, especially at age 66, says Tim Driver, of RetirementJobs.com, which lists jobs for people 50 and over. Still, some industries are waking up to the fact that many customers and clients prefer dealing with older workers.

“The caregiver category is huge,” says Driver. “If you’re taking care of people in their eighties or nineties, you are typically rewarded for being a little older.” Other categories friendly to seniors include retail positions and driving gigs for, say, retirement communities.

Eager to leave your career job for one that makes the world a better place? Check out the section at RetirementJobs.com that lists jobs for nonprofits, including the Peace Corps. Encore.org, which encourages second careers with a social purpose, also posts nonprofit jobs, including those in health care, education, government and the environment. Most are relatively low-paying; expect to do well but not to get rich. 

With a new full-timeposition, you’ll have accessto whatever benefits otherfull-time employees get, including health insurance. If you’re already enrolled inMedicare but have accessemployer coverage that pays first, you can take it and drop Medicare parts B and D. You may re-enroll without penalty when you re-retire. If you have retiree coverage from a previous employer, ask there what happens if you drop it while you work. Chances are, you’ll lose it forever. 

HEALTH COVERAGE FOR EARLY RETIREES

By Kimberly Lankford

For months, media reports have focused on the troubles with HealthCare.gov and the state insurance exchanges set up under the Affordable Care Act. Now the government is reporting that some 8 million people have signed up for health insurance on the exchanges. But that’s not the end of the story. It’s a whole new world of health insurance 

For example, when you retire, you can usually keep health insurance through your employer for up to18 months through COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985). That’s the federal law that requires employers with 20 or more employees to let workers stay on their health plan after they leave their jobs. But you’ll have to pay the full cost yourself, and that could be pricey because employers generally pay 70 percent to 85 percent of the premiums.But losing employer coverage (even if you are eligible for COBRA) is one of the “life-changing events” that can allow you to buy health insurance outside of open-enrollment periods, whether you buy a policy on your state exchange or directly from an insurer or agent.

If you buy on the exchange, you may qualify for a premium subsidy even if you earned too much while working. To be eligible for a subsidy, your income in 2014 must be less than $46,680 if you’re single or $62,920 for a couple. That includes the amount you earned while working plus your expected income for the rest of the year. In addition, if your income is less than 250 percent of the federal poverty level ($29,175 if single or $39,325 for a couple), you can qualify for a cost-sharing subsidy that reduces co-payments and other out-of-pocket expenses – but only if you buy a silver insurance plan.

Note that converting a traditional IRA to a Roth or taking taxable withdrawals from a traditional IRA or 401(k) boosts your income. However, Roth withdrawals don’t count as income. Contributions to a health savings account reduce your income.