Part time retirement question | The Boneyard

Part time retirement question

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NHRich

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Key employees are very near retirement. One leaving very soon. Large high tech software company. One very senior key person wants to retire, but willing to stay on part time for a year or so. Should that person work for their current “hourly” rate, or negotiate hours and salary at
a higher rate?
 
Whatever is comfortable for both sides. There are no rules here. Is hours worked really important or are there certain outcomes or deliverables that would make a lump sum and deadline more appropriate or do you just want this person around for a specific period of time to transition. Each case is different, but it is imperative that expectations are clear and acceptable to both sides. This person doesn't need to continue working so if anything you accommodate their needs a bit more than you would otherwise, but you also need to know what your getting and why you think you need it as presumably someone else is stepping into this role and having the former occupant hanging around may not be the best thing.
 
NHRich said:
Key employees are very near retirement. One leaving very soon. Large high tech software company. One very senior key person wants to retire, but willing to stay on part time for a year or so. Should that person work for their current “hourly” rate, or negotiate hours and salary at
a higher rate?
Expand ...
I live in essentially a retirement community in North Carolina. I retired 20 years ago, but there are a fairly large number of new retirees in the 55 to 65 age group. Talking to some of them who have maintained a consulting position with their old companies they almost universally had negotiated a contract with their old companies. These contracts have been for higher salaries than when they were working and some specified fringe benefits such as medical coverage.
If the company didn’t have the foresight to groom replacements for “Key” employees they will recognize that they will need to pay a premium to maintain the intellectual expertise. I would recommend the individuals be aggressive in negotiating their consulting contract.
 
NHRich said:
Key employees are very near retirement. One leaving very soon. Large high tech software company. One very senior key person wants to retire, but willing to stay on part time for a year or so. Should that person work for their current “hourly” rate, or negotiate hours and salary at
a higher rate?
Expand ...
Their rate will be higher. When I had people try thus, we said, Thanks but no thanks.
 
hangover GIF


They should go with this approach...
 
UCTitleTown said:
Their rate will be higher. When I had people try thus, we said, Thanks but no thanks.
Expand ...
Worked for a place that took that tack and ended up having to beg the guy to come back 6 months later. When they did finally agree to new terms and he came back on a 2 day a week basis, it was a very adversarial relationship that did not last long.
 
.-.
RichZ said:
Worked for a place that took that tack and ended up having to beg the guy to come back 6 months later. When they did finally agree to new terms and he came back on a 2 day a week basis, it was a very adversarial relationship that did not last long.
Expand ...
The best advise I give to people at work and take myself, is everyone is replaceable and don't overestimate how important you are. If you think you're going to ask for double to consult compared to what you made before, prepare for a reality check.
 
UCTitleTown said:
The best advise I give to people at work and take myself, is everyone is replaceable and don't overestimate how important you are. If you think you're going to ask for double to consult compared to what you made before, prepare for a reality check.
Expand ...

The famous person quotation that makes your first point is, "The graveyards are full of indispensable men."

Then again, I wonder how many people here have no idea who Charles de Gaulle is.
 
UCTitleTown said:
The best advise I give to people at work and take myself, is everyone is replaceable and don't overestimate how important you are. If you think you're going to ask for double to consult compared to what you made before, prepare for a reality check.
Expand ...
Remember when CBD recited indispensable man?
 
.-.
UCTitleTown said:
The best advise I give to people at work and take myself, is everyone is replaceable and don't overestimate how important you are. If you think you're going to ask for double to consult compared to what you made before, prepare for a reality check.
Expand ...
This is why corporate culture has no place in governing people. I’ve seen this first hand, and watched as the “expendable” person gets constantly called back for guidance. The company was lucky that the guy just liked to do the work and face the challenges. He also had a better job, at better pay, faster than he was replaced… which never really happened because he was truly irreplaceable, doing the work of 2-3 people, 24x7x365.
 
NHRich said:
Key employees are very near retirement. One leaving very soon. Large high tech software company. One very senior key person wants to retire, but willing to stay on part time for a year or so. Should that person work for their current “hourly” rate, or negotiate hours and salary at
a higher rate?
Expand ...

I know teachers who have retired but are allowed to continue to work up to 40% of previous days/year. They're actually making more money because the 11% for pension and $1k/yr for union dues aren't deducted.
 
RichZ said:
I know he's still dead.
Expand ...

Wasn't de Gaulle the one who ordered US soldiers out of France, and Johnson asked if he meant us to also dig up the buried soldiers who died saving France's ass? Can't remember the quote, but it was a great one.
 
Last edited:
temery said:
Wasn't de Gaulle the one who ordered US soldiers out of France, and Johnson asked if he meant us to also dig up the buried soldiers who died saving France's ass? Can't remember the quote, but it was a great one.
Expand ...

“Ask him about the cemeteries, Dean!”​

 
I retired from a company 15 years ago when they were offering packages. I got the package but since my position was "eliminated" in the eyes of the IRS I had a 3 year moratorium on doing work for my old company. I had a business plan to consult which I implemented in the 2 months following my retirement. My hourly charges were significantly higher consulting.
 
.-.
My wife is a VP at a fortune 30 company. She gave her notice ( 30 days) basically retiring from corporate life. They asked her to stay longer and she asked for a lot more for the extra time.
I don’t think it’s possible to keep quality people that have made up their mind to leave without throwing them a carrot.
 
NHRich said:
Key employees are very near retirement. One leaving very soon. Large high tech software company. One very senior key person wants to retire, but willing to stay on part time for a year or so. Should that person work for their current “hourly” rate, or negotiate hours and salary at
a higher rate?
Expand ...
If the employee plans to collect Social Security and isn't at full retirement age, there will be a limit to what can be earned without a penalty.
 
My understanding is that usually when one goes part time, they no longer get benefits, and so hourly wages increase. That's true for anyone working on a 1099 basis, whether semi-retired or not. It's quite popular for a spouse of someone who does have healthcare coverage to work on that basis.
 
HuskyHawk said:
My understanding is that usually when one goes part time, they no longer get benefits, and so hourly wages increase. That's true for anyone working on a 1099 basis, whether semi-retired or not. It's quite popular for a spouse of someone who does have healthcare coverage to work on that basis.
Expand ...
They also will have to pick up both sides of Social Security and Medicare.
 
.-.
Baltic said:
I live in essentially a retirement community in North Carolina. I retired 20 years ago, but there are a fairly large number of new retirees in the 55 to 65 age group. Talking to some of them who have maintained a consulting position with their old companies they almost universally had negotiated a contract with their old companies. These contracts have been for higher salaries than when they were working and some specified fringe benefits such as medical coverage.
If the company didn’t have the foresight to groom replacements for “Key” employees they will recognize that they will need to pay a premium to maintain the intellectual expertise. I would recommend the individuals be aggressive in negotiating their consulting contract.
Expand ...
I did the consultant thing for awhile. I worked for the guy I had trained who didn’t care where I was as long as I was available to answer his questions. Great gig then the Great Recession hit and I became a full time golfer.
I was set up as a private contractor for 20 hours a week . I was paid to be available 10AM to 2PM EST ,more than actually working. I didn’t get the same benefits and had to pay both halves of the SSI* /Medicare which sucks however my hourly wage was significantly higher.
I made enough with my pension and that alleged “job” to hold off collection of SS which helps long term.
 
There is a history of upper management upping $ to keep people from leaving. Is there an appropriate/safe way to negotiate $ given the intent is to stay and work part time anyway?
 
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