Can You Take Pension & Work Another Job Full-Time?

Your pension plan is a retirement plan that your employer fully funds on your behalf. Your pension plan alleviates the responsibility of you having to come up with your entire retirement savings. Your employer provides a minimum benefit payment to you when you retire. But you don't have to retire when you leave your employer to receive your pension payment.

Significance

A private pension plan is nothing more than a saving plan that is set aside for you for retirement. You may choose to take this pension plan as monthly payments or as a lump sum amount. Regardless, you may continue working and receive your pension since a pension plan does not place restrictions on how much you can and cannot make after you retire.

Benefit

You get additional income on top of your normal working income. This may provide you with significant income as you get older, since part of your income is income you don't have to work for. This may allow you to expand your lifestyle and purchase things you could never afford before your additional pension income.

Disadvantage

The disadvantage comes when you start qualifying for Social Security. The more you work, the less money you may receive from Social Security. The reduction is based on your age and the benefit you are receiving (i.e. early retirement benefit, full retirement and delayed retirement benefit). Additionally, one-half of your Social Security benefits is added to all of your other income. If this total income exceeds $25,000 if you're single or $32,000 if you're married, then your Social Security income will be subject to ordinary income tax.

Consideration

Consider retiring at some point. While you may want to continue working, the government actually penalizes you for doing so. You paid Social Security tax all of your life to fund your Social Security insurance payments. But, if you continue working and claim Social Security benefits, you will lose some or most of your benefit payment. If you do plan on working into your advanced age, consider delaying claiming Social Security benefits for as long as you can.

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