Working after retirement example: Kristen
Meet Kristen
Retired at age: 55
Started HOOPP pension: January 1, 2020
Years of service: 14
Average annualized earnings: $70,000
Kristen retired at age 55 and started collecting her pension on January 1, 2020. She had 14 years of eligibility and contributory service and average annualized earnings of $70,000. In January 2022, at age 57, she decided to go back to work. Kristen called
HOOPP to discuss her options, and decided to put her pension on hold to re-enrol in the Plan and start contributing again to continue building her pension. During this period, she worked for two years with annualized earnings of $70,000.
The amount of monthly pension Kristen would have received for those two years, had she not re-enrolled as member, was $27,600, plus any cost of living adjustments (COLA) as approved by HOOPP’s Board of Trustees.
When Kristen decided to stop working and start collecting her pension again on January 1, 2024, at age 59, she had built a bigger pension for her retirement during those two years. Until she reaches age 65, she will receive an extra $375 per month (including
her bridge benefit) and an extra $330 per month every month after she turns 65. This increase to her pension helps to increase her financial security in retirement.
It would take Kristen about six years after restarting her pension to collect the $27,600 she would have received in pension payments had she not returned to work. However, the extra two years of contributions will still pay off in the long run. For
example, if she lives to age 75, she will receive an additional $39,000 in pension payments over and above the pension she would have received if she had not gone back to work.
Let’s take a closer look at Kristen’s options in the next tab.
Because Kristen is going back to work for two years, she can afford to pause her pension payments since she will receive higher pay than her pension would provide. Plus, as a result of her extra contributory service, her pension will be even higher when
she retires.
|
Monthly income before resuming contributions and going back to work |
Monthly income after working and resuming contributions
|
Monthly income after restarting her pension after the additional two years
|
Monthly lifetime pension |
$1,010 |
$0 |
$1,340 |
Monthly bridge benefit |
$140 |
$0
|
$185 |
Total monthly pension |
$1,150 |
N/A |
$1,525 |
Monthly pay from work |
N/A |
$5,833 gross amount, less HOOPP contributions and any other payroll deductions |
N/A |
All amounts shown are gross, before tax or payroll deductions.