Maybe you’ve heard something like this from a recently-retired friend: “You can only play so much golf.” Or maybe you’re coming up on retirement yourself, and the thought of how to fill all that free time that you’ve never had before is starting to sink in—in an intimidating way.
The fact is, all of us require meaning from our lives. That’s just as true for thriving retirees as it is for idealistic twenty-somethings. And for most retirees or those approaching retirement, the thought of sitting on the porch all day, watching TV, and waiting for the mail carrier doesn’t equate to a meaningful way to spend the time.
Many retirees, in fact, are starting post-retirement careers or taking part-time or full-time jobs in retirement. Some are motivated by the sense that they still have a lot to offer, others are counting on the extra income to supplement and extend the useful life of retirement savings, and still others simply want to continue feeling plugged into life in a meaningful way. Regardless of your motive, though, if you’re considering post-retirement employment of some kind, you need to do some careful prep work.
1. Make sure you understand your “why”
What is it about your contemplated post-retirement job or business that most motivates you? It could be a dream that you’ve had since childhood and just never got around to pursuing; it could be a desire to be around people you enjoy, doing work you believe is important; it could be a simple goal of delaying Social Security benefits for a few years. Whatever it is, keep that motivation at the center of your search as you evaluate various opportunities. Make sure that your post-retirement “gig” is the right fit for your needs and aspirations. The Encore Career Handbook (Workman Publishing, 2013) is a great resource for those who want to start figuring out the “why” of their post-retirement working plans. In fact, the Encore.org website is another excellent place to start your research. Specializing in connecting workers from different ends of the age spectrum, Encore “bridges divides and collaborates across generations to create a better future together.”
2. Carefully evaluate your time commitment
If one of the pillars of your retirement lifestyle is “time with grandkids,” you probably won’t want to consider a job that requires 40–50 hours weekly. Likewise, if travel is what you’re most looking forward to, you won’t want to be tied down to a job that doesn’t allow you the flexibility to take off for parts unknown, whenever you get the chance. And remember, there’s nothing wrong with part-time work. Even though you may not be bringing in anything close to the size of your pre-retirement paycheck, you’d be surprised how much even part-time income can stretch your retirement resources. That $20,000 per year you receive for your part-time work at the food bank or history museum equates to a 5% annual withdrawal from a $400,000 retirement account.
3. Build your work plans into your retirement strategy
Once you’ve settled on the post-retirement employment situation that best fits your needs and goals, factor it into your overall retirement strategy. If your post-retirement work qualifies you for lower-cost health insurance, that savings has major implications for the cash you’ll need from your retirement nest egg. If you expect to be earning a significant income from your “second-act” work, you may want to adjust the assumptions for needed growth in your investment portfolio.
I work with thriving retirees and those who are preparing for retirement to design smart, individualized strategies that can help to provide for a secure, satisfying retirement lifestyle. Most critically, I am a fiduciary, which means that I am legally and ethically obligated to provide advice and recommendations that place my clients’ best interests before everything else. Click here to download my report, “The Fiduciary Standard and the Individual Investor,” to learn why it is critical to have a trusted advisor guiding your retirement strategy.
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