5 Reasons Not to Retire

Much of my professional time is spent either strategizing with clients about their retirement or writing about this topic.  It seems engrained in our brains to ‘work towards’ our retirement.  Most people target retiring around age sixty-five with a few thinking earlier and some later.  Some, but very few, have no intention of retiring.  These may be the smart folks.  I have a saying I often quote during these retirement strategy sessions, “Retirement is overrated”.  Don’t get me wrong, some people absolutely flourish in their retirement years.

                                                                                  “Retirement is over rated.”

I recently spoke with one client who retired from an executive level job and moved back to the family home on a rural farm.  She is having the time of her life and doesn’t miss her work at all.  For the flip side, I have a friend who’s a retired specialty physician, who very much misses his practice.  He has plenty of money but misses the comradery and intellectual stimulation that was part of his work life.

Here are 5 reasons you might not want to retire:

  1. Secure your finances. Easily, eighty percent of workers arrive at normal retirement age significantly under-funded.  Continuing to work past normal retirement age has so many potential benefits:
    1. Buy time to pay off all your debts. There is perhaps nothing as financially exhilarating as being completely debt free.  One goal might be to continue working until your mortgage and all other debts are paid off.
    2. Delay taking Social Security. Every year you delay taking Social Security beyond your normal retirement date (around age 66 for most Baby Boomers), your lifetime benefit rises eight percent.  Delay until age seventy, your benefit will be 32% higher.  Most importantly, if you predecease your spouse, he or she ‘steps into your shoes’ and receives your benefit (if it’s higher) for life.  This can be big bucks.  My father delayed Social Security until age seventy and then lived to age ninety-nine.  As a result, his lifetime benefits exceeded $1 million!
    3. Allow your investments to continue to grow. Assuming your work income is enough to pay your basic living expenses, you won’t have to tap your investments allowing them several more years of growth.  For all the folks who are underfunded for retirement, this is critical.
  2. You love your job. My doctor friend said, “I made a mistake.  Never give up a job you love, particularly a high-paying job!”  If you love your work, be careful about giving it up for retirement.  Think about the aspects about your job that make it so enjoyable and then think realistically about retirement life.  How exactly will you fill the forty to fifty (work) hours during retirement?  “Well, I’ll play more golf!” …or you could substitute fishing, hunting, hiking, biking or reading.  I’ve spoken with a lot of people who later discovered, “There’s only so much golf you can play!”
  3. Mental stimulation. For me, one of the most enjoyable parts of my job is the mental and intellectual stimulation I get working with a very bright group of colleagues, outside professionals and clients.  Working with a couple’s finances is like solving a big jig-saw puzzle…there are lots of moving parts that all must fit together.  It can be complicated and often takes a team of experts to develop the right solution for that client’s particular circumstances.  That kind of intellectual collaboration may be hard to find outside the workplace.  For many people, men especially, their identity is strongly tied to their work life and position.  I remember a retired CEO saying, “My jokes are no longer funny!”  Think about it…
  4. Maintain job perks. Many of you have very valuable job perks including employer paid-for health insurance, life insurance, disability insurance, vacation, and matching 401k contributions.
  5. Spousal harmony. Ok, this is my feeble attempt at humor, but you’d be surprised at how many times I’ve heard a wife say, “He has to keep working.  I can’t have him hanging around the house all day!”

Create the best of both worlds.  Many companies understand the importance of retaining the ‘brain-talent’ associated with older, highly experienced employees and will offer flexible working arrangements.  We have an anesthesiologist client who loved her work but also loved to travel.  She negotiated cutting her work time (and income) in about half and now lives her perfect life…enjoying her job even more than before and seeing the world through extensive travel.  Could you do the same thing?  You won’t know unless you ask!