# Pension and Retirement. **URL:** \ **Category:** Factual Questions\ **Created:** [November 23, 2014, 1:53pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403 "2014-11-23T13:53:18Z")\ **Posts on this page:** 15\ **Page:** 1
**Author:** ![QuickSilver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quicksilver/32/7832_2.png) [@QuickSilver](https://boards.straightdope.com/u/QuickSilver)\ **Post date:** [November 23, 2014, 1:53pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/1 "2014-11-23T13:53:18Z")
If a person reaches the age of 65 and begins to recieve his Social Security pension, however continues to work, is he “retired”? Same person, reaches the age of retirement at his company and takes their retirement package, then continues to work as a consultant, is he “retired”? On the IRS tax return does he declare his pension and regular income along with the status, “retired”? Or is he “retired” only when he finally stops working and lives on his pension income alone (investment income notwithstanding)? ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [November 23, 2014, 2:03pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/2 "2014-11-23T14:03:17Z")
> [@QuickSilver](#): > > If a person reaches the age of 65 and begins to recieve his Social Security pension, however continues to work, is he “retired”? I would say not. He is retired if he doesn’t work. (note: in the US, you can receive SS starting at age 62 or later than 65, your choice. The monthly amount is reduced or increased as per a formula.) > [@](#): > > Same person, reaches the age of retirement at his company and takes their retirement package, then continues to work as a consultant, is he “retired”? Depends on what he wants to call himself. Probably not. > [@](#): > > On the IRS tax return does he declare his pension and regular income along with the status, “retired”? I don’t think the IRS asks that (status), nor do they care. The tax rate is dependent upon age and income. > [@](#): > > Or is he “retired” only when he finally stops working and lives on his pension income alone (investment income notwithstanding)? I would say yes. In short, you are retired if you say you are. Generally, that means you have discontinued your main job or occupation as a full-time endeavor. ---
**Author:** ![What\_the](https://avatars.discourse-cdn.com/v4/letter/w/f4b2a3/32.png) [@What\_the](https://boards.straightdope.com/u/What_the)\ **Post date:** [November 23, 2014, 2:18pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/3 "2014-11-23T14:18:33Z")
At the risk of sounding snarky…what dif does it make? Are you focusing on the “Occupation” line of page two on the 1040? ---
**Author:** ![HoneyBadgerDC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/honeybadgerdc/32/1033_2.png) [@HoneyBadgerDC](https://boards.straightdope.com/u/HoneyBadgerDC)\ **Post date:** [November 23, 2014, 2:24pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/4 "2014-11-23T14:24:25Z")
I think the irs distinquieshes between earned income and unearned income. Unearned is taxed at a lower rate than earned. SS and other retirement funds would fall under unearned income. ---
**Author:** ![QuickSilver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quicksilver/32/7832_2.png) [@QuickSilver](https://boards.straightdope.com/u/QuickSilver)\ **Post date:** [November 23, 2014, 2:25pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/5 "2014-11-23T14:25:17Z")
I’m focusing on my understanding of the term vs. someone who insists it means that he has been retired since 2001 (because he’s been drawing a SS pension) despite declaring a 6 figure income in the years following because he continued to work as a 1099. To be more specific, he is filling out a US gov form (not IRS related) that asks if he was retired and when with spaces to provide the last three years of declared income. ---
**Author:** ![What\_the](https://avatars.discourse-cdn.com/v4/letter/w/f4b2a3/32.png) [@What\_the](https://boards.straightdope.com/u/What_the)\ **Post date:** [November 23, 2014, 3:03pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/6 "2014-11-23T15:03:53Z")
> [@QuickSilver](#): > > I’m focusing on my understanding of the term vs. someone who insists it means that he has been retired since 2001 (because he’s been drawing a SS pension) despite declaring a 6 figure income in the years following because he continued to work as a 1099. > > To be more specific, he is filling out a US gov form (not IRS related) that asks if he was retired and when with spaces to provide the last three years of declared income. The form should have some instructions if it is an important distinction. ---
**Author:** ![JerrySTL](https://avatars.discourse-cdn.com/v4/letter/j/e274bd/32.png) [@JerrySTL](https://boards.straightdope.com/u/JerrySTL)\ **Post date:** [November 23, 2014, 3:10pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/7 "2014-11-23T15:10:02Z")
I retired from the military in 1997. In 2013 I retired from adjunct instructor position at a local college. I receive retirement income from both. However I’m still working full-time and certainly don’t consider myself retired. If asked I’ll describe myself as retired military or retired from the college, but still working otherwise. In other words, I’m not retired. However when I start drawing Social Security I would consider myself retired even if I have a part-time job. My advice to QuickSilver is to read the rules for the form in question and see what it says. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [November 23, 2014, 3:12pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/8 "2014-11-23T15:12:28Z")
There is no legal definition of “retired”. However, some organizations use a practical definition, internally, for purposes of their own. As a practical matter, you are considered retired if you meet the criteria of eligibility for retirement benefits. which is usually the attainment of some specified age. In most such cases, you can continue to work, remuneratively or otherwise, without affecting your benefits. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [November 23, 2014, 3:15pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/9 "2014-11-23T15:15:31Z")
Yes, does it matter? Do it affect the amount of taxes paid? IMHO (which counts for nothing with the IRS) “retired” means no longer working. But then, how would you classify someone who has finished his employment with a company, taken his pension, started collecting SS but goes back to do special projects as a consultant? What if he waited 2 years as “retired” before doing so? what if he only consults 3 months of the year? How does the IRS treat a person who is, say. a plumber but makes a decent but irregular income on the side playing with a band in nightclubs? What about the full-time mother who has 3 wildly different part-time jobs? I suspect the IRS does not care what you put there as long as it’s not fraudulent or illegal (I.e. claiming to be a soldier, engineer, doctor, or law enforcement - various occupations where pretending to be one can be a crime). They just want your money. I suspect the occupation is more for classification. They might use it for procedures like “this year we’ll audit all the dentists reporting under $80,000” But, for the sake of definition, if the person is working more days than they are off, I would say they put their working job. If they are sitting at home more work days than working, they are retired… but if they want to call themselves something, who cares? ---
**Author:** ![QuickSilver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quicksilver/32/7832_2.png) [@QuickSilver](https://boards.straightdope.com/u/QuickSilver)\ **Post date:** [November 23, 2014, 3:27pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/10 "2014-11-23T15:27:22Z")
> [@JerrySTL](#): > > My advice to QuickSilver is to read the rules for the form in question and see what it says. Well, my first thought was to RTFM. I did. Instructions simply say to check which-ever item applies to you. Those include retirement flag and date, unemployed flag and date, or simply the option to leave those off, and of course spaces for declared income (regardless of source). So not very clear. Which leads me to believe it may not matter very much in the end provided there is a source of income. Still, we got into a slight difference of opinion as far as what retirement meant. So I was hoping it would be better defined. Seems like it’s somewhat open to interpretation. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [November 23, 2014, 3:35pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/11 "2014-11-23T15:35:09Z")
> [@QuickSilver](#): > > If a person reaches the age of 65 and begins to recieve his Social Security pension, however continues to work, is he “retired”? I would say he is not. He might be a “retired X” if is no longer working in a field that provided a pension which he is now collecting and is currently working in a different field. For example, someone who was a cop or a firefighter, retired and began collecting a pension after 20 years and is now working as a contractor is a retired cop or firefighter, but is not retired. Or someone might be semi-retired, which usually means continuing to working the same field but on a part-time basis - a dentist who cuts back to 2 days a week or someone who consults for a couple of months a year, for example. But if he’s working at the same job, for the same number of hours and the only thing that changed is that he collects SS, then he’s not retired in any sense. ---
**Author:** ![Snnipe\_70E](https://avatars.discourse-cdn.com/v4/letter/s/b5a626/32.png) [@Snnipe\_70E](https://boards.straightdope.com/u/Snnipe_70E)\ **Post date:** [November 23, 2014, 4:30pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/12 "2014-11-23T16:30:23Z")
At 66 I began collecting SS, but I kept working full time. My last day of was October 31, I am now retired. If I go back to work in a different job full time and still receive my retirement check from the union and SS, I am retired from engineering. My brother in law retired from AT&T as a installer. Went to work for PT&T, he was retired from AT&T but not retired. He is now retiered from both. Oh there was the San Jose Assistant Fire Chief who went out on a disability retirement from San Jose to take the Morgan Hill Fire Chief’s job. No way would I say he was retired. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [November 23, 2014, 4:46pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/13 "2014-11-23T16:46:33Z")
> [@QuickSilver](#): > > I’m focusing on my understanding of the term vs. someone who insists it means that he has been retired since 2001 (because he’s been drawing a SS pension) despite declaring a 6 figure income in the years following because he continued to work as a 1099. I’d suggest changing the subject by pointing out that he could have increased his future Social Security income by delaying the start of payments. (Presumably someone in his 60s and 70s who is getting a six-figure income doesn’t _need_ the money.) ---
**Author:** ![QuickSilver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quicksilver/32/7832_2.png) [@QuickSilver](https://boards.straightdope.com/u/QuickSilver)\ **Post date:** [November 23, 2014, 6:02pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/14 "2014-11-23T18:02:02Z")
> [@Dewey\_Finn](#): > > I’d suggest changing the subject by pointing out that he could have increased his future Social Security income by delaying the start of payments. (Presumably someone in his 60s and 70s who is getting a six-figure income doesn’t _need_ the money.) That’s a whole other can of worms. Nope. Not touching that one. He now insists on checking the “unemployed” and and corresponding date. I ask him if he plans to go back to work and he says, “No, I’m retired now!” :smack: Because, “Lawyers and accountants… what do they know?! I know more than any of them! I’ve been doing my own taxes for years!” Nuff said. ---
**Author:** ![Fuzzy\_Dunlop](https://avatars.discourse-cdn.com/v4/letter/f/848f3c/32.png) [@Fuzzy\_Dunlop](https://boards.straightdope.com/u/Fuzzy_Dunlop)\ **Post date:** [November 23, 2014, 10:20pm UTC](https://boards.straightdope.com/t/pension-and-retirement/705403/15 "2014-11-23T22:20:07Z")
> [@HoneyBadgerDC](#): > > I think the irs distinquieshes between earned income and unearned income. Unearned is taxed at a lower rate than earned. SS and other retirement funds would fall under unearned income. Unearned income is not taxed at a lower rate than earned income. You may be thinking of long term capital gains, which are a type of unearned income. In general unearned income (interest income, real estate rental income, short term capital gains, etc.) are taxed at an identical rate to earned income. The IRS does distinguish between the two for other reasons. For example, you can’t contribute to an IRA in excess of your earned income. If your only source of income is unearned you can’t contribute to an IRA at all.