The overall aging demographics of the U.S. workforce are well known. As a result, the traditional approach to “retirement” has evolved from ceasing all work to moving into “phased”, “partial” or even “blurred” (stopping and then returning for periodic employment) “preretirement”. There are many reasons why people find themselves needing to work longer – increased longevity, the lingering effects of the “Great Recession of 2008”, and/or family needs and financial considerations.
There are many people age 50+ who may have a desire to change their approach to work by relocating to be near family or move to a warmer climate or just eliminate the hassle and expense of commuting. They may still want to work in their industry but believe that it may be impractical or even impossible to find a balance between their desired lifestyle and work.
One of the biggest hurdles of leaving their current employer to work on a self-employed basis is the cost of medical insurance. And, it’s definitely a big consideration. Many workers estimate the cost by using their employer’s COBRA premium cost as a placeholder. Or, they may have researched the Affordable Care Act (ACA) Exchange premium rates for the location where they will be living and assumed that the cost of either approach relative to their estimated future pay makes it too difficult a trade-off to leave their current job.
In doing the comparison many people fail to take into account any ACA subsidies that they (including a spouse) may receive if their future income ((defined as Modified Adjusted Gross Income (MAGI)) is between $12,140 – $48,560 for one person for 2019. For a couple, the minimum income is $16,460 and entirely phased out at $65,840. The Kaiser Family Foundation has a very useful ACA subsidy estimator (www.kff.org). For example, take someone that may be considering part-time work making $25,000 annually. Based on the average national monthly cost of the Silver ACA plan of $1,016, the individual’s cost – after subsidies – is estimated at only $141 a month.
It’s important to note that any Social Security benefits that a person receives are included in determining MAGI, so generally it’s not a good idea to start Social Security benefits if the person is planning to take advantage of the ACA subsidy. If someone has started taking Social Security benefits and it has been less than 12 months, they can pay the money back in a lump-sum and defer taking it until a later date.
Lastly but of equal importance is how can someone explore the possibilities of working from home? That’s where our firm – WAHVE – “Work at Home Vintage Experts” can help. We match qualified people age 50+ with 25 years of work experience to specific industry jobs. This allows them to work remotely on an independent contractor basis. For 8 years now we have been matching people to employers looking for specific experienced talent. To learn more about what we do and how we do it go to www.wahve.com. If you’re an employer looking to retain talent in accounting, human resources, insurance and other disciplines, please contact us to help you fill your needs.