Retirees back at work

As an AARP Tax Aide volunteer, I have done taxes for several retired people who are still working. One was a 91 year old woman who is the assistant manager of our local Goodwill store. Wow!

Of course, taxes are paid on income, so it’s impossible to see whether these senior workers have large savings that supplement their Social Security. But I suspect they don’t, because they are usually women and they are not reporting large (if any) IRA MRDs. Rather, they are ekeing out a meager existence on scanty Social Security and pensions (if any) from earlier careers. Some have no income other than their Social Security so they are forced to work.

One of the best changes in the CARES Act was to make the Earned Income Tax Credit available to workers over age 65. This helps the old low-paid worker get the same benefit as younger workers without an arbitrary age cutoff.…

**It Isn’t Just Tom Brady—More People Are Coming Out of Retirement**
**Employer demand and newfound flexibility are drawing many early retirees back into the workforce after a surge in pandemic retirements**
**By Kathryn Dill, The Wall Street Journal, March 30, 2022**

**Millions of U.S. workers retired during the pandemic. Now many are returning to work at rates not seen since 2020....In February, the share of retired workers re-entering the workforce climbed to around 3% of total retirees, its highest level since early March 2020...**

**Many are people under the official retirement age who, spurred by rising asset values or Covid-19 worries, left the workforce ahead of schedule, labor economists say.**

**Some now are returning to work to shore up their finances. Others have been presented with another career challenge...Labor shortages, a recent stock-market rout, plus the widespread availability of remote-work options, could lure more early retirees back to the job market in the coming months, too, they predict....** [end quote]

This article is more a rah-rah about how much fun it is to go back to work. In fact, one of my cousins (a just-retired high school principal) has just gone back to work as an airline customer service agent because he misses human interaction.

As a Macro trend, the return of the retired labor force can include early retirees, older retirees who enjoy work and older retirees who are forced to work by financial need.

Labor Force Participation Rate

Labor Force Participation Rate - 25-54 Yrs.

Labor Force Participation Rate - 55 Yrs. & over.

The Labor Force Participation Rate - 55 Yrs. & over was 40% in 1970. It declined to 30% in 1990 but rose to 40% in 2010 - 2020. There was a slight dip to 38% during the pandemic which may be increasing, but that may be noise.

Social Security Income is taxable above a fairly low income.…

**According to the IRS, the quick way to see if you will pay taxes on your Social Security income is to take one half of your Social Security benefits and add that amount to all your other income, including tax-exempt interest. This number is known as your combined income (combined income = adjusted gross income + nontaxable interest + half of your Social Security benefits).**

**If your combined income is above a certain limit (the IRS calls this limit the base amount), you will need to pay at least some tax.**

**The limit is $25,000 if you are a single filer, head of household or qualifying widow or widower with a dependent child. The limit for joint filers is $32,000. If you are married filing separately, you will likely have to pay taxes on your Social Security income.**

Retirees who go back to work should calculate whether their earned income will cause a significant tax on their Social Security.

Retirees who crave social interaction but don’t need the money can find many volunteer opportunities to serve.



Surprised last week in my local super market to see two guys pushing 90 doing some bagging. Had similar thoughts.

one of my cousins (a just-retired high school principal) has just gone back to work as an airline customer service agent because he misses human interaction.

Which level black belt is needed to subdue irrational/unruly wanna-be passengers?

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