Q: I have eight more years to work until my retirement age (66). I plan on working as long as possible. What I want to know is, will I be able to still work full-time while collecting Social Security, or will I only be able to work so many hours? Although I still have a while until retirement, I’m trying to gather as much information as I can now. – F.V., Norristown, Pennsylvania.

A: You can work while you receive Social Security retirement (or survivors) benefits. While you’re working, your earnings will reduce your benefit amount only until you reach your full retirement age. Social Security (SSA) uses a formula to determine how much your benefit must be reduced.

If you’re under full retirement age for the entire year, SSA deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2008, that limit is $13,560. In the year you reach full retirement age, SSA deducts $1 in benefits for every $3 you earn above a different limit, but only counts earnings before the month you reach your full retirement age. For 2008, that limit is $36,120 for the months before full retirement age. More information is available on this page at the Social Security Administration Web site.

Q: My family just experienced the deaths of both parents within a 20-day period. In addition to other assets willed to the heirs, there exist IRAs worth a little over $40,000. Our parents had made one brother the beneficiary to provide easy access to these IRA funds if needed. It was intended that upon their deaths, the funds remaining would be divided four ways. As it turned out, there was no need to access the money prior to their deaths, and there’s no conflict over intent; the named beneficiary agrees to the division of funds.

Is there a way these IRAs can be rolled over into individual children/heir accounts, one for each heir, and allow them to accrue and grow, making withdrawals at a later time, as dictated by the age and retirement schedule of each heir? – M.D.F., Denton, Texas.

A: Your problem sounded pretty complicated, so I turned to Jeff Maas and Briggs Matsko, of Lincoln Financial Advisors Corp., Sacramento, Calif., for advice. Briggs is a nationally-recognized retirement income distribution specialist. Their response:

Since there’s only one named beneficiary, the IRAs cannot be split four ways, with the exception of the option below.

Your brother can take the required minimum distribution, or RMD, from the IRAs, as required by the IRS, over his life expectancy, which would accomplish your goal of deferring liquidation and taxation. He would divide the year-end value of the accounts by his age in the life expectancy table (following IRS rules) and take a distribution each year. He could then take the after-tax amount, split this money four ways and gift the three siblings the correct amounts. The other option would be for your brother to disclaim the IRAs, which would send them through the probate process or direct the account as stated in a pour-over will. An estate planning professional should be contacted about these options.

Q: I just read your column about Civic Ventures and Encore careers. Since my own “retirement,” I’ve had eight part-time jobs, all chosen because I read something in the paper and thought the job might be fun, I could learn something and make a few dollars besides. I’ve been a security guard, real estate photographer, marketing data collector, shoe salesperson, and best of all, tasting room host at two small California wineries.

Most recently, I’ve been an instructor and District Coordinator for the AARP Driver Safety Program, the nation’s first and largest refresher program for drivers over age 50.

I tell you all this not to brag, but to demonstrate that being active is the key to a mentally and physically healthy life after one moves from the daily working life to the life of opportunity.

I’ve been saying for years that the term “retirement” should be removed from our vocabulary as it relates to the world of work. To me, “retirement” only meant that because I was fortunate to work for 30 years in a setting that provided excellent benefits for the remaining years of my life, I could now explore new opportunities. Others are not so fortunate financially, but I don’t think that matters as much as finding fun and rewarding things to do, new worlds to explore, new challenges for the mind, new opportunities, and having a willingness to try new things just because they look interesting. – G.B.L., Spring Hill, FL.

A. Along with the benefits you mention, there’s abundant evidence that staying active keeps the brain active and leads to greater longevity. Keep it up!

Related posts:

1. Reader mailbag: Roth IRAs, Social Security and IRA withdrawals
2. Reader mailbag: Working while receiving Social Security disability
3. Reader mailbag: Allocations, Social Security taxes and Roths
4. Reader mailbag: Social Security COLAs and spousal benefits
5. Reader mailbag: Reverse mortgages, retirement income and Social Security

Tags | encore career, IRA, Q&A, Social Security