Employment After Retirement

You’ve Chosen a New Career – Some Important Things to Know

Soon, one day you’ll be retired and free to follow many of your dreams and desires: golfing, tennis, traveling, all until your heart is content. You may eventually find yourself wanting something more to life. When this occurs, some people consider additional hobbies, but many contemplate beginning another career – this time around the emphasis is fun.

Whether you miss interacting with children, enjoy working with your hands, have a collecting hobby that may be profitable or simply always has an interest in another type of profession, many of today’s retirees have tread this path ahead of you. There are some important things to consider before taking this new step in your life.

Medicare

At age 65 you’re eligible for Medicare. Medicare is our country’s basic health insurance program for people 65 or older and many people with disabilities. Medicare eligibility is not based on income or resource levels. Your Medicare eligibility will not be affected by how much income you earn after retirement.

Social Security

Your Monthly Benefit: You may elect when you begin receiving Social Security (SS) anytime after you reach the age of 62. If you choose to receive SS prior to your full retirement age (the age the government says you should retire at) your monthly benefit will be permanently reduced to compensate for the early withdrawal. If you were born before 1938 the full retirement age for SS is 65. Because of longer life expectancies, the full retirement age is slowly increasing from 65 to 67 on a tiered system with 67 being required of anyone born after 1959. You can start your SS benefits as early as age 62, but the amount you receive each month will be less than if you start at full retirement age.

Working In Retirement: If you retire at your full retirement age there no limitations on your income while receiving SS. If you retire before your full retirement age, your payments may be reduced depending on the amount you earn until you reach the full retirement age.

• If you are under full retirement age (FRA): when you start getting your Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2003 that limit was $11,520.
• In the year you reach your FRA: $1 in benefits will be deducted for each $3 you earn above a different limit, but only counting earnings before the month you reach FRA. For 2003, this limit was $30,720.
• Starting with the month you reach FRA: you will get your benefits with NO limit on your earnings.

Please Note: Earned income is defined as income from wages or net earnings from self-employment. Pensions, 401K distributions, dividends, interest, and IRA distributions are NOT earned income. More detailed information is available from your local Social Security office or at www.ssa.gov.

School Service

You may miss the children, your co-workers, the atmosphere or even the cafeteria food from your old job. You do have to worry about whether this will affect your pension. If you are inclined to still work in the public school system in some fashion, whether part-time or fulltime, there is no limit on the number of days you may serve in a district, which is experiencing an emergency shortage of personnel. No contracts or consultations are required. A school district may employ a PSERS retiree if no other appropriately certified teacher is available within the required subject area. The employer makes the determination that these elements have been satisfied. It should be noted that disability retirees may not be employed in any capacity in a Pennsylvania public school. Otherwise, at least one of two criteria must be met:

1. Emergency

• an increase in the workload;
• a serious impairment of service to the public. A common example would be the need for a substitute employee when regular staff is unable to come to work (illness, personal leave, etc.).

2. Shortage of Appropriate Subject Certified Teachers

In retirement you do have to worry about the provisions of Act 48 to retain a teaching certification if that was your profession. For the time being, continuing education courses are still required. Unless returning to full service and not serving in these emergency capacities, your earnings will not be a part of your retirement calculations.

Please Note: If a you return to service in a nonemergency capacity, you must immediately notify the PSERS Member Service Center at 1-888-773-7748 to stop the monthly annuity check and to avoid an overpayment situation. Your annuity then becomes “frozen,” and you will be placed in active status. This provision also applies if you enter state service and elect multiple service membership. The additional service credit earned after your return to service accumulates separately and is not added to your original or “frozen” service. If you retire again before reaching 3 years of service credit under your “new” account, the retirement benefit is calculated as the sum of your two separate retirement portions - the “frozen” annuity and the “new” portion. Both figures are then added together to form a single benefit amount. After three years of active service the benefit may be recalculated.

Extracurricular School Employment

• You are hired by the school employer for an extracurricular position that is conducted outside of regular instructional hours and that is not part of the school’s mandated curriculum;
• You are employed under a separate written contract with the school employer; and
• The written contract contains both a:
  1. waiver by you of any potential retirement benefits that could result from the post-retirement employment; and
  2. release of both the employer and PSERS from any liability for benefits related to the post-retirement employment.

Continuing Education Requirements