As baby boomers approach retirement, they increasingly ask: “What date should I retire?” That’s a very tricky call, requiring us all to look into the crystal ball and predict the course of medical advances, inflation, fossil fuels and who knows what else.
Then I read an interesting piece in the Globe & Mail that puts forward “Four reasons to work past retirement age.”
It led me to thinking that we tend to look at retirement as this tremendously loaded question with a fixed date when all work ends. This has both emotional and financial consequences. But I believe the question needs to be shaped differently, so it isn’t like an On/Off switch.
The fact is many people derive a great deal of satisfaction from their work. Or it they don’t, they wish they did. So why can’t “retirement” serve as a second chance to redesign your career? Instead of feeling trapped by income expectations and organizational politics, you can feel free to pursue the type of work you would find most satisfying – on your own terms.
The reality is, if you have planned for your retirement, the financial demands of your second career shouldn’t be too onerous. That means you can work less, without putting yourself out to pasture. Any income you make represents savings you don’t have to eat into. Even better, what you save actually compounds like the rest of your investments.
So let’s say, for argument’s sake, that you work two days a week and earn a quarter of what you did before “retirement.” Even if you continue at that rate for only a few years, that could easily add up to more than $100K, even before you account for the compounding.
But don’t let yourself get trapped – this scenario doesn’t mean you have to take any job that comes along. While many people have difficulty suddenly adapting to a blank calendar, choosing to work as a Wal-Mart greeter or Big Mac flipper isn’t going to be a ticket to well being.
Like every other decision to do with retirement, the earlier you start to plan and the more consideration you give to your choices, the happier and wealthier you’ll be.
We love to help our clients explore different options that balance wealth and happiness. Let us know if we can be of assistance to you or someone you care about.