10. I’m between jobs and do freelance and consulting work to get by. Will I have to pay taxes on that income?
A.Yes, you’re subject to federal income tax and self-employment tax onthat income. But on the bright side, you’re also eligible to takeadvantage of a host of deductions related to your business: home officeexpenses, including the purchase of equipment, paper and postage;expenses related to business meals, entertainment and travel; cellphonecharges and other expenses. Remember that it’s important to keepdocuments and records of the expenses you itemize.
11. What happens to my pension if my company goes bankrupt?
A. The good news is that company-sponsored defined benefit plans are generally protected under the Employee Retirement Income Security Act. So if your company went belly-up, the federal Pension Benefit Guaranty Corp.(PBGC) would step in to pay your pension benefit. The bad news is thatthe payout is capped—in 2009, workers who retire at age 65 are eligibleto receive up to $4,500 a month, or $54,000 a year.
Among pension plans typically not covered by the PBGC are those offered by “professional service employers” such as doctors and lawyers with fewer than 26 employees; plans sponsored by church groups; and plans sponsored by federal, state or local governments. The PBGC does not insure defined contribution plans, such as profit-sharing or 401(k) plans. To find out if your plan is covered, check with your plan administrator or ask for a copy of the summary plan description. (See more on this topic from AARP.)
12. Where can an older person like me go to find a job?
Carole Fleck is a senior editor for the AARP Bulletin.