Should I Work Part-Time After I Retire?

Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington public employees.

I get this question all the time from clients approaching retirement.

They're in their mid-to-late 50s. The pension numbers work. They're financially ready.

But they're not sure they want to stop working completely.

Maybe they love what they do and just want to dial it back. Maybe they want to stay connected to their profession. Maybe they're worried about losing structure and purpose.

So they ask: Can I retire and then go back to work part-time?

The answer isn't just "yes" or "no." It's more complicated than that. And the wrong move could cost thousands of dollars in pension benefits.

The 867-Hour Rule You Need to Know

Here's what most Washington public employees don't realize about working after retirement.

If you retire from a DRS pension and then return to work for any DRS-covered employer (schools, state agencies, cities, counties), there's a strict limit.

You can only work 867 hours per calendar year without affecting your pension.¹

That's roughly 16 hours per week for a full year.

Go over that limit by even one hour, and your entire pension stops. Not reduced. Stopped.¹

It doesn't restart until you either separate from that employer or January 1 of the next year, whichever comes first.¹

The rule gets more complicated depending on your specific situation. Some retirees can work up to 1,040 hours under temporary legislation that runs through January 1, 2030.¹

For school districts, qualifying PERS, SERS, and TRS retirees can work in non-administrative positions.¹ The term non-administrative means positions that do not require an administrative certification (like Principal, Vice Principal, Program Administrator, Superintendent) and do not evaluate staff.¹

And there's another requirement that catches people off guard.

You must wait at least 30 consecutive days after your retirement date before returning to work for any DRS employer.² You also cannot have any pre-arranged agreement (written or verbal) to return to work before you retire.²

When Part-Time Work Makes Sense

From what I've seen working with Washington public employees, part-time work after retirement makes sense in a few specific situations.

First, when you want to stay engaged but need more flexibility. Teaching two classes instead of five. Working school hours instead of administrative hours. Doing the parts of your job you love without the parts that drain you.

Second, when you have specialized knowledge that's hard to replace. School districts especially struggle to fill certain positions. If you have expertise they need, working part-time can be mutually beneficial.

Third, when you're testing retirement before fully committing. Some people retire, try it for a few months, and realize they miss the structure and social connection. Working part-time can ease that transition.

But here's what I always ask clients to consider: Is the financial benefit worth the restrictions?

Because once you're subject to that 867-hour limit, you have to track every single hour carefully. Paid holidays count. Compensatory time counts. Sick leave and annual leave taken in place of normal work hours count.¹

Miss the mark and you lose months of pension payments.

The Private Sector Alternative

Now if you work for a non-DRS employer after retirement, none of these restrictions apply.

Your pension continues. No hour limits. No waiting periods.¹

The coffee shop down the street? That's not a DRS employer. Your pension keeps coming.

A private consulting firm? Not a DRS employer. Your pension keeps coming.

Even working for a different state's government or federal government? Not a DRS employer in Washington's system. Your pension keeps coming.

This is the path many retirees take when they want to work but don't want to deal with DRS restrictions.

I've worked with clients who retired from state agencies and then started consulting for private firms. They make more per hour than they did as state employees, work on projects they choose, and their pension never stops.

What About Social Security?

This is where it gets even more interesting.

Because if you're collecting Social Security before your full retirement age and you work, there's a completely different set of rules.

For 2026, if you're under full retirement age for the entire year and earn more than $24,480, Social Security reduces your benefit by $1 for every $2 you earn above that limit.³

In the year you reach full retirement age, the limit jumps to $65,160, and the reduction is only $1 for every $3 you earn above the limit.³ This only applies to earnings before the month you reach full retirement age.³

Once you reach full retirement age, you can earn as much as you want with no reduction to your Social Security benefit.³

So if you're planning to work part-time and you're collecting both a DRS pension and Social Security before full retirement age, you need to think about both sets of rules.

The Tax Consideration

Here's something else to think about.

When you combine a pension, Social Security, and part-time work income, you might push yourself into a higher tax bracket.

Let's say your PERS 2 pension is $3,500 per month. That's $42,000 per year.

Add Social Security of $2,000 per month. That's another $24,000.

You're already at $66,000 of taxable income.

Now add part-time earnings of $20,000 from working under the 867-hour limit.

You're at $86,000. And depending on your filing status and other factors, that could mean a higher marginal tax rate than you expected in retirement.

I'm not saying don't do it. I'm saying run the numbers first.

Because sometimes the after-tax benefit of that part-time income is less attractive than it appears on paper.

What This Means for You

If you're thinking about working part-time after retirement, start by asking yourself why.

Is it purely financial? Is it about staying engaged? Is it because you're not sure you're ready to fully retire?
The answer to that question changes everything.

If it's financial, run the numbers carefully. Factor in taxes, lost leisure time, and the hassle of tracking hours if you're going back to a DRS employer.

If it's about staying engaged, consider whether private sector work or consulting might give you more flexibility without the restrictions.

If you're not ready to fully retire, be honest with yourself about that. There's no shame in working longer before pulling the retirement trigger.

The worst move you can make is to retire, go back to a DRS employer without fully understanding the rules, exceed 867 hours, and lose months of pension payments you were counting on.

That happens more often than you'd think.

​Sources

1. Washington State Department of Retirement Systems. "Returning to Work." https://www.drs.wa.gov/life/return/
2. Washington State Department of Retirement Systems. "Retirees returning to work must wait 30 days." https://www.drs.wa.gov/rrtw-wait-30-days-newsfeed/
3. Social Security Administration. "What happens if I work and get Social Security retirement benefits?" https://www.ssa.gov/faqs/en/questions/KA-01921.html