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Working after you retire rarely comes easily

Financial planners often advise prospective retirees who might not have sufficient income during retirement to plan on continuing to work after age 65.

That sounds good in theory but is frankly unrealistic for most employees. The latest statistics from the Department of Labor illustrate how difficult it is to gain employment after 64. Even between ages 55 and 64, it is difficult to get a job providing income close to what you were receiving in your previous position.

According to the Bureau of Labor Statistics, the unemployment rate for individuals 55-64 was 5.4 percent, as of July.

However, two thirds of individuals in the 55-64 age group who did find a new job received an average 18 percent pay cut. The re-employment rate for this group was 47 percent. For those over 64, the re-employment rate was 24 percent. Those rates were considerably lower than the group ages 20-64 (62 percent).

According to the AARP Public Policy Institute, between 60 and 80 percent of workers expect to work in retirement; however, in 2012, 18.25 percent of people 65 and older were working. This is far fewer than the number who expected to work.

There are two contributing factors: First, there are not enough jobs to fill the demand; and second, the available jobs do not pay enough. After computing costs and taxes, many retirees decide that there is not enough incentive to work.

According to the AARP Foundation Litigation, age discrimination is another problem. Approximately 64 percent of older workers (45-74) say they have seen or experienced age discrimination in the workplace. Unfortunately, the Supreme Court in 2009 made it more difficult for seniors to sue successfully for age discrimination.

Make sure you understand your income before you retire, taking into consideration your full retirement age (called FRA) for Social Security eligibility, which is based on your year of birth. Consult this website to see a breakdown:

Contact Social Security to determine your precise full retirement age. If you need to retire before that, you can initiate Social Security income as early as age 62. However, you would receive 20-30 percent less (based on your FRA).

Another key factor is health insurance. Many individuals who leave their jobs prior to age 65 find that the cost of health insurance is very high. Medicare is not available until 65, and many employers have curtailed or eliminated health insurance for retirees. Make sure you understand what your out-of-pocket health-insurance costs would be prior to age 65. Even after that age, Medicare will cover only 80 percent of your health-care costs, and a supplemental policy to cover the gap will generally cost about $200 a month.

Many individuals start businesses during retirement. Although many succeed, there is a high rate of failure for new businesses. If you are considering entrepreneurship, I suggest contacting a local SCORE chapter. SCORE is a nationwide organization that offers low-cost seminars and free counseling to prospective and small business owners. SCORE volunteers, mostly retired, have a great deal of diverse business backgrounds and provide essential services for new business owners. I have volunteered at SCORE for more than 12 years and can attest to the experience and professionalism of its volunteers.

Planning for retirement is not easy. Examine your sources of income. Decide when to apply for Social Security. If you retire before 65, understand the cost of health care. Unless you have a specialized occupation that is age-proof, don’t assume you will find work after retirement that will provide wages comparable to your pre-retirement pay. Don’t assume it will be easy to start a successful business. Saving more and investing conservatively while you are working is better.

Elliot Raphaelson welcomes your questions and comments at


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