Dow Jones News - May 17, 2005

Retirement Taxes Mind as Well as Wallet

“Obviously, continuing to be a member of the work force - albeit on your own terms - can have a big impact on your nest egg. At first, Robert Smith, of Anthem, Ariz., filled his days by driving up and down the coast of California, reading the newspaper, and following the zigs and zags of the stock market on television.

“But, psychologically, he wanted more. ‘You need something to do to feel like you're productive rather than running out and spending money all the time,’ the 64-year-old former school-equipment salesman said.

“So Smith started working from home part-time fielding customer service calls for AAA, Office Depot Inc. (ODP), and Carnival Corp. (CCL) [through virtual call center company WillowCSN]. That changed his retirement spending ability. By supplementing his income from Social Security and taxable investments, he hasn't yet dipped into his IRA funds. Plus, he's now qualified for a better health insurance plan through the state because he is considered a small business owner.”