Profile > Lon Harris, 63, retired but working, Kirkland. Nest egg: IRA, pension, Social Security. Lon Harris retired in 1999 at age 57...

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Profile: Lon Harris, 63, retired but working, Kirkland. Nest egg: IRA, pension, Social Security.


Lon Harris retired
in 1999 at age 57 and began drawing a $1,300-per-month pension.

The pension, earned after 26 years at Puget Sound Energy, is not indexed for inflation and will never rise. He could have taken a lump-sum payout instead, but opted for monthly checks so his wife would have income in the form of survivor’s benefits if he died first. Mrs. Harris died in 2003.

“I had the option of lump sum, but at the time my wife was living and I was planning for her future if I went first,” says Harris. “The tables were turned on me.”

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He stayed retired for all of one week. A contractor offered him full-time work similar to the project management he’d done for decades; he realized, “I just didn’t feel like retiring.”

He plans to work several more years until eligible for Medicare and full Social Security payments, which he expects to be $1,600 per month. He also hopes to draw $1,200 per month from his IRA, 40 percent of which he has invested in the stock market. From this total income of about $4,000 per month he plans to buy health insurance to supplement Medicare — so-called Medigap insurance.

Health and maintaining adequate insurance are his top concerns: “It’s expensive and they cover less and less while my contribution goes up.” Existing health problems make him ineligible for long-term-care insurance, he says. His IRA savings — along with $200,000 equity he has in his house — are intended to pay for any assisted living or other high-cost medical expenses later in life.

“It’s kind of a security blanket,” says the father of six grown children. “It’s there if you need it with serious health problems.”


Take-away tip:
Access to group health insurance, even if you pay the premium yourself, is a crucial consideration for those returning to work after retirement. For those 55 and older, the medical coverage may be more valuable than the pay, especially if you aren’t yet qualified for Medicare. Reality check: Price insurance for yourself and any dependents before retiring before 65.