(MONEY Magazine) – Don Conley has it all -- a loving family, a secure retirement and challenging work that not only satisfies his soul but slakes his wanderlust. When he retired as vice president of public affairs at Honeywell Inc. in Minneapolis in 1987, he agreed to serve as president of the American Refugee Committee, a nonprofit group that provides medical and other assistance to refugees in Thailand, the Sudan and Malawi, as well as to those relocating in the U.S. and elsewhere. ''I love playing tennis and relaxing with my family,'' says Conley, ''but I also need the intellectual stimulation I get from working on solutions to complex problems. My work with the American Refugee Committee allows me to feel I'm giving something back to a world that's been generous to me.'' In the next year, Conley and his wife Janet will circle the globe on a 10- week trip that will begin with a vacation in Hawaii, continue with work- related stops at refugee camps in Southeast Asia and Africa, and end with a stay in Geneva to meet with United Nations officials on refugee issues. Conley puts in at least four days a week for ARC plus additional time for the United Way and for two local hospitals on whose boards he serves. For his volunteerism, he receives a modest supplement to his retirement package from Honeywell Consultants, an organization established by his former employer to encourage retired executives to continue active community service. Why people choose to work or not to work after retirement is rarely simple. Nearly a quarter of retirees hold jobs. Half of the working retirees recently surveyed by Travelers Corp. reported financial need as their main reason for returning to the job market. For the other half, the reasons were a skein of emotional hungers from companionship to self-esteem. And what of those retirees who have happily turned their backs on work for good? ''Many retirees discover that they have been waiting all their lives to do nothing,'' says retirement planner Paul Westbrook of Watchung, N.J. The problem is that few people really come to grips with the question of continuing to work until they have retired. Then they are in a far less flexible position to, say, start a new career or find the perfect part-time position. ''People often have only hazy notions of what retirement will be like, and they don't realistically think about how they are going to spend all those thousands of hours,'' says Anita Lands, president of the Greater New York Chapter of the International Society of Preretirement Planners. She advises that you begin exploring the options at least five years before you retire. The basic ones: full- or part-time work for your former employer or a new one, experimenting with a job in a new field, taking temporary positions with a variety of employers, doing volunteer work or launching your own business. Your first step should be estimating a job's effect on your finances; perversely, working in retirement doesn't always put much more money in your pocket. Many people -- like a growing number of early retirees who took reduced pension packages and face a longer post-work life -- wind up as inflation's orphans. They simply have to work. If you have filled out the worksheet on page 29, you should have a reasonable idea of whether your retirement nest egg will be big enough to carry you through by itself. The other financial figuring you need to do will tell you how much going back to work might cost you. When you take into account increased tax payments and reduced Social Security benefits, for instance, you could pocket less than $7,400 from a $30,000 post-job-job paycheck if you are between age 65 and 70. (See the table on page 76.) From age 70 on, you may earn as much as you like without losing any benefits. ''If you're going to be so highly compensated that your earnings would wipe out your Social Security benefits anyway, it can make sense to defer filing for benefits as long as possible, because the longer you defer, the higher the payment you'll receive when you do apply,'' says John Parrott, vice president of Creative Retirement Planning in New York City. Next come taxes. Even though you may be receiving Social Security benefits, you still must pay FICA taxes out of your earnings, at a rate of 7.51% in 1989 and 7.65% in 1990. Your job earnings may also push you into a higher combined federal, state and local tax bracket and could make up to half of your Social Security benefits subject to federal income tax. Advises Westbrook: ''Run through the calculations with the help of a planner or tax professional to determine what your net gain would be from a job at various earnings levels.'' Now you are ready to weigh the emotional side of the work issue. If you don't need the extra income, stop and consider what may be the most fulfilling kind of work for the retired person: volunteering. Says Anita Lands: ''Unpaid work can handle many of those ego needs that are satisfied by a job, like a sense of contributing and expertise.'' Challenging volunteer opportunities abound. The National Executive Service Corps (257 Park Ave. South, New York, N.Y. 10010) offers management consultant positions for nonprofit groups ranging from the National Football Foundation & Hall of Fame to the New York Philharmonic. NESC is also developing a special program that trains retired engineers and scientists to fill the need for high school science and math teachers. And the Service Corps of Retired Executives (800-368-5855), sponsored by the Small Business Administration, matches members with the owners of small and start-up businesses who need counseling. Whatever you decide to do, don't try to remake yourself into someone you're not. ''While many people view retirement as some kind of Camelot, the truth is that you're the same person you were before, driven by the same likes and dislikes,'' says Westbrook. So a salesman probably shouldn't think about becoming a librarian. And if you've been setting your own pace, you are not going to be happy working under close supervision now. Sometimes, of course, you just fall into your niche. When she started her job, Rose Simon saw it as a way to keep active. ''I just wanted to be with interesting people of all ages,'' recalls the 76-year-old widow and retired teacher. So she became a part-time tour guide and lecturer at the Museum of Science and Industry in Chicago. That was 10 years ago. In the interim, she has led a veritable United Nations of visitors through the museum. Recently she appeared on NBC-TV's Late Night with David Letterman. In the five-minute taped segment, she showed the acerbic star a World War II German submarine on exhibit at the museum. While the job is more fun than ever, the $5,000 Simon earns by working three days a week, nine months a year is now a necessity too. The rent on her Hyde Park apartment has doubled to more than $700 a month, and her other costs have gone up at the same frightening pace. The $22,000 or so she receives from Social Security, savings and pension is no longer enough. If you're looking for executive or professional work, you'll need patience. Easy starting points like newspapers, personnel departments and employment agencies will probably lead nowhere. ''More than 80% of jobs are never advertised but are filled instead by people who become experts at networking,'' says consultant Anita Lands. Getting the word out to friends, relatives and former co-workers that you are in the market for a particular type of job can turn up fruitful contacts. And don't let the specter of age discrimination stop you for a moment. Says Don Hill, president of Forty Plus of the Greater Washington, D.C. area, one of the network of self-help groups for job-seeking executives and professionals over 40: ''We've found it takes about seven months on average to get the kinds of jobs our members are seeking, during which you'll have to make about 450 contacts, fill out 90 job applications and go through six interviews. So we tell our members to forget about age discrimination and get to work.'' Another reason to ignore age discrimination: it's being done in by the baby bust, which is adding too few new workers to the market. Happily, this in turn has nurtured a growing appreciation of older workers. In 1981, Travelers started a job bank at its Hartford headquarters to recruit retirees to meet 60% of its temporary employment needs; by 1985, demand for retirees had grown so much that the company began recruiting them from other insurance companies. Opportunities for flexible, part-time work in particular are on the rise. Reason: all the restructuring and downsizing of corporations has eliminated full-time jobs while creating part-time ones, according to John A. Thompson, chairman of Interim Management Corp. in New York City. When Kelly Services began actively recruiting retirees in 1987, 7% of the 550,000 employees it places annually were age 55 or older; now the proportion is nearly 12%. While most such jobs are clerical and secretarial, temporary employment in professional and management positions is also on the rise. Interim Management Corp. places retired and between-jobs senior executives in temporary posts ranging from chief executive officer to operations manager. Assignments average six months, and interim managers are amply rewarded. For instance, a woman who retired as controller of one corporation recently took a five-month stint at another for $44,000 -- more than half of the $80,000 she earned annually in her previous position. If, on the more ambitious end of the work spectrum, you have long harbored the dream of becoming an entrepreneur after retirement, be warned: a mountain of preliminary research is required to see whether there is a healthy market for your service or product and to get an accurate idea of all costs involved. And once launched, you'll have to work harder than you ever have to make a go of it. ''Too often people discover too late that self-employment is not for them,'' says planner Westbrook. But for the few that succeed, it can be a revelation. After a 25-year career as a federal bureaucrat in Washington, D.C., Morris Cohen, 61, decided when he retired last year that he wanted to get as far away from white-collar lockstep as he could. ''I wanted to work with my hands and run my own business,'' he says. A magazine article he happened to read in a doctor's waiting room revealed that windshield-repair franchises were among the fastest growing and least expensive to buy. Using the Yellow Pages and reference materials in the library, Cohen eventually came upon a smaller company that could offer the equipment, training and supplies he needed for an investment of only $2,000. He took the plunge in the summer of 1988, working out of his home in Rockville, Md. He has since moved to St. Petersburg, easily taking the one-employee (himself) business along. Working 15 hours a week, he made just a few thousand dollars during his start-up year, but his $25,000 pension is his cushion. In five years, he expects to be making $40,000, still working part time and still not regretting his leap from civil-service follower to master of his fate.

BOX: How to pay 75% tax on $30,000 The table at right shows how little a 65-year-old retiree actually pockets from a job that pays $30,000. The biggest outrage: he must give back Social Security benefits at the rate of $1 for every $2 earned above $8,880. Next there is a 7.51% FICA tax on the $30,000. Then income taxes. And finally a Medicare surcharge. The calculations assume he gets $20,000 in pension and investment income, including the maximum Social Security benefit ($10,788 in 1989), files as a single taxpayer and pays state and local tax totaling 19% of the federal tax.

Gross salary $30,000 Minus lost Social Security benefits $10,560 Minus FICA tax $2,253 Minus federal, state and local tax $9,318 Minus Medicare surcharge $477 Net salary $7,392