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Author Topic: How to creatively limp into retirement  (Read 13306 times)
farm_boy
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« on: December 04, 2012, 1:02:40 PM »

From the start I need to confess extreme ignorance, so I'm open to even obvious suggestions.  I have my daily activities planned out for my retirement, but I have no idea what to do for the next 10 years (I'm 52).  I should never have gone into teaching, but that's another story.  I'm an instructor with a year-by-year contract that could end at any time.  I don't like teaching and I suck at it.  And winning the lottery has not worked out well for me so far.

I'm vested in two states, so at about age 60 I'll start getting little checks.  I'll also have a rental house paid for by then, and I've already bought the acreage in the woods for the dream home.

Will affordable private health insurance (catastrophic) policies be available after Cobra ends, even for those of us with pre-existing conditions?  Will part-time work be allowed while drawing retirement?  Is there some way I could work part-time from home, even though I have no job skills to speak of?

I suppose a visit to Human Resources might be a good idea.

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melba_frilkins
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« Reply #1 on: December 04, 2012, 4:05:44 PM »

Yes, go visit human resources. They may tell you that you need to make an appointment to talk to someone from StateRetirementAgency. It all sounds boring and tedious--go do it anyway.

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michigander
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« Reply #2 on: December 05, 2012, 10:55:32 AM »

I'm not clear myself on how things will play out under the Affordable Care Act a/k/a Obamacare, but I don't think the availability of private pay health insurance coverage will be a concern, nor will pre-existing conditions.  It's the affordable part that is yet to be determined.  The largest health insurer in my state happens to be in a kind of legal limbo right now as the legislature piddles around not passing necessary legislation so a lot is very much up in the air.
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farm_boy
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« Reply #3 on: December 05, 2012, 3:18:44 PM »

Thanks for the replies.  To complicate it even further, I may teach English overseas for a few years before I start receiving my retirement checks here.  Coming and going from the U.S. may make health insurance coverage even more challenging.
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pedanterast
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« Reply #4 on: December 17, 2012, 9:25:23 PM »

I have become expert in Obamacare so if someone wants to start a thread in On the Money with questions about that, I will respond.  Earning money will not affect your state retirement monies but will affect Social Security if you choose to collect it at 62.  From 62 to 65 every dollar you earn over $15,120 (in 2013) will reduce your benefit by half a dollar.  There is a special and complex rule for the year in which you reach retirement age and then at 66 you can earn as much as you want, or maybe 67 in your case.  One thing I will say about Obamacare is that if you are eligible for the subsidy (an income level of about $45k for a single person), then the premium the insurance company charges is irrelevant.
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larryc
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« Reply #5 on: December 18, 2012, 2:48:02 AM »

If you teach overseas I believe your income is tax free--is that right?

As for PT work, how about teaching online?
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scampster
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« Reply #6 on: December 18, 2012, 4:58:55 AM »

If you teach overseas I believe your income is tax free--is that right?


I wish someone would tell this to the country I work in!

The US has tax treaties with many countries, so this will vary. I pay taxes here, but I get my pension contribution returned to me when I leave if I stay for less than 2 years.
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frogfactory
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« Reply #7 on: December 18, 2012, 8:54:52 AM »

If you teach overseas I believe your income is tax free--is that right?


I wish someone would tell this to the country I work in!

The US has tax treaties with many countries, so this will vary. I pay taxes here, but I get my pension contribution returned to me when I leave if I stay for less than 2 years.

I believe you can get at least some portion of the contribution back regardless.  It's not necessarily a clever thing to do, but I'm pretty sure it's not depndant on time served or nationality.
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pedanterast
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« Reply #8 on: December 18, 2012, 8:03:07 PM »

If you teach overseas I believe your income is tax free--is that right?  As for PT work, how about teaching online?

If you are out of the country for 330 full days in any 365 day period, you can exclude up to $95,100 (for 2012; this is adjusted for inflation every year) of income that was earned (meaning you cannot exclude dividends, interest, capital gains, pensions, etc.) during that 365 day period (which need not correspond to a calendar year).  However, any amounts excluded under this 'Form 2555' would need to be added back in to compute your income for purposes of the Obamacare subsidy.  Note that in most but not all states, this exclusion would get you out of state income tax as well.  Most states use federal taxable income as a starting point and are known as 'piggyback' states but there are a few states that are not like that and you might have to pay state tax.

I have one more semester to go but did not teach this semester, and I did on-line tutoring for a for-profit corporation, working with mostly students at for-profit schools.  It kind of sucked but there was a lot of down time I got paid for.  They pay $18-$20 per hour and require a master's.  Might do that some more after I retire.  The hours were quite flexible.  

Spanish tutors get $30 an hour around here, if they are any good.  I believe the ever cheerful Farmboy's field is Spanish.  I have some kind of BS 'tutor certification' people seem to like so maybe pick that up as you go along.  It was ten hours of training and 25 of experience I think, or maybe 50.
« Last Edit: December 18, 2012, 8:04:58 PM by pedanterast » Logged
farm_boy
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« Reply #9 on: December 19, 2012, 3:10:47 PM »

"ever cheerful" Farmboy

hee hee

Thanks for all your comments. 

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pedanterast
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« Reply #10 on: December 20, 2012, 12:59:46 AM »

If you have a favorite sport, learn to officiate it.  That's a good part time job.  Age can be an issue but you could probably do softball until you were 65 and volleyball until you were 75.  Basketball not so much.  But if you get in with a city rec department or similar you can also do scorekeeping once you get really decrepit.  Some municipalities will give you free rec center privileges too.

If you can swing it, there is a tax credit for low income people who contribute to retirement accounts.  So if you can live off savings or return of basis for a few years, and work part time, it's pretty easy to make that part-time work tax free.

Finally, you can go back to graduate school, borrow more money, and select the "income based repayment plan."  You could clear about $15k a year for say six years, meaning you can borrow $20k a year and then you find some cheap program for $5k a year (of which the government will pay about 25% if you know how to do it).  You will never end up repaying the money because you will never go back to work.  The way they recent reformed the student loan laws left huge loopholes; it is the Senior Citizen's Free Education Act, if correctly manipulated.
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farm_boy
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« Reply #11 on: December 20, 2012, 9:11:51 AM »

I made the mistake of investing in rental property about 10 years ago, so I probably will never qualify for any low-income program, even though my two little houses are worth half as much now as what I paid for them and I've been losing money every month for 10 years (rent doesn't cover expenses).

I suppose I could sell them in a few years and hide the money....

The biggest piece of the puzzle will be health insurance.

The suggestions for part-time work are interesting.  I suck at teaching, so tutoring probably isn't a good fit for me.  I have permanent injuries from an accident, so any job with manual labor (e.g. standing and walking) are out.

Which reminds me, I haven't checked last night's winning Lotto numbers yet.   brb
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pedanterast
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« Reply #12 on: December 20, 2012, 11:28:46 AM »

I made the mistake of investing in rental property about 10 years ago, so I probably will never qualify for any low-income program, even though my two little houses are worth half as much now as what I paid for them and I've been losing money every month for 10 years (rent doesn't cover expenses).

Obamacare does NOT look at assets, or wealth, at all.  It only looks at the AGI on your tax return (plus any tax free bond interest and foreign earned income excluded) so losing money on rental properties will make you get MORE of a subsidy for your health coverage and is, in fact, a more attractive strategy starting in 2014.  Under Obamacare, you will either have enough money of your own to buy insurance or Uncle Sam will help you buy it.  So don't worry. 

Tutoring isn't really teaching and you might even be good at it.  How hard can it be to tutor Spanish on line?
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farm_boy
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« Reply #13 on: December 20, 2012, 12:01:55 PM »

Pedanterast, you're full of good news today! 

So then it may make sense for me to wait to pay off the rental houses until I can get Medicare (if it still exists in 15 years) to keep my AGI low until then.  Not that I expect to pay them off much earlier than that anyway.

Tutoring on-line??  That sounds interesting.  In fact, I plan to attend an online teaching workshop in January.  However, it seems to me that to teach/tutor online you must be affiliated with some university, and at my university my colleagues who teach on-line do tons of extra work every semester for just a few hundred extra dollars.  I know one colleague in my office who claims it comes out to be about minimum wage.
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pedanterast
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« Reply #14 on: December 20, 2012, 5:22:01 PM »

No, I was working for a private company, a unit of Pearson called Smarthinking.  I got $18 an hour and half the time I was reading novels.  I know for sure they do Spanish, although I don't know if the pay is the same.  My guess is that it is.

Yes, keep AGI low until Medicare.  Do this aggressively.  For example if you don't have the money to make your 401k contribution or your IRA contribution (which goes up by $500 in 2013 BTW), it would be worth it to borrow the money because you will save enough on health care to pay it back.  Don't make Roth IRA contributions.  Make traditional ones. 

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