Working in retirement sounds absurd on the surfaceâ”I mean it isn’t really retirement if you have to work, is it?
But there are actually solid reasons to work during your retirement years, at least on a part-time basis. This isn’t about being gloomy on retirement prospects eitherâ”it’s about being prepared for a world where outcomes are uncertain. And even if we can’t know what retirement will look like right now, we can still prepare ourselves to be ready for what ever it might be.
Why you might need to continue working past retirement
There is no shortage of reasons why we may have to work past retirement age. Consider some of these:
1. Statistics and surveys are indicating that most people don’t have enough money saved up to retire
The future of Social Security is highly uncertain, but we can be pretty sure that benefits will be less than what they are now
Traditional pension plans are hard to come by, and even if you do have one few people stay on jobs long enough to make them work the way they’re supposed to. Job losses are hampering retirement account contributions
2. The financial markets don’t always cooperate with our long term plans
Planning some sort of post-retirement career is one way to develop a back up plan in case any of the above become a negative factor in your overall retirement plans. Increasingly, we have to think of retirement planning as having multiple componentsâ”and income sources.
Types of post-retirement careers
You can be either employed or self-employed in retirement, and which one you choose will be affected by how you want to live in retirement. Especially nowadays. Self invested personal pensions and traditional pension plans are hard to come by!
If you opt for a job, you probably will want to consider a part-time job since it will permit at least semi-retirement. Some of the questions you’ll need answered include:
- Does the field you want to go into employ senior citizens?
- Are there part-time opportunities in the field?
- What is the pay level for part-time work?
- What are the geographic restrictions (is there work where you want to retire?)
- Is it a field that matches your skill set?
- Is it the kind of work you’d like to do?
For many people, the best employment opportunities will be to continue to work in the same field they’re in now, but in a reduced capacity. But again, you’ll need to ask the same question because the job you have now may not suit your future aspirations. Or you may just be tired of it and ready to move on to something completely different.
Self-employment is another route. The advantage here is that it’s easier to work a business around retirement, and that you don’t need anyone to hire you. Both open a lot of possibilities.
Still you have to ask a few questions:
- Is it a business that you will like working in?
- Can you make enough money doing it?
- Will there be any geographic limitations?
- How much capital will it require to start?
- Do you have the skills to make it a success?
Self-employment can be attractive since most people dream of doing it at some point, and retirement often provides the opportunity. Also, if you’ve never been self-employed before it can be a new adventure that keeps you going for a lot of years.
Why you may need to plan your post-retirement career now
The job market looks a lot different when you’re in your 60s or 70s. When you’re younger you can consider a job almost anywhere, but as you get older a lot of employers won’t want you. For this reason, you can appreciate why planning a retirement career is something that should be done well in advance.
As you see from the questions in the last section, there are fine points to consider in a retirement career. It will be, most likely, a career change, whether you go into a different field of employment or start your own business. Either will have to be planned for now.
This is especially true with self-employment, since you will probably need to start the business well before retirement that way it will be a ready income stream when you need it.
Also, consider that if you’re making a wholesale changeâ”doing work you’ve never done beforeâ”you will need to do some research, get training or even work a few apprenticeships. That last one is especially good since you could work in the field for a short time and find that you don’t like it. Then, you’ll have to look into something else.
Another factor is personal. Many people work in jobs and careers that don’t really like, and it can be a stretch after doing that for an entire career to let yourself go and think seriously about working in something you really would like to do. Some people know what that is right now, for others it could take years to figure out.
What ever you decide on, you’ll want it to be something you like a lot better than what you’re doing now. After all, even if you can’t fully retire, you still want to enjoy your golden years.
Being ready for what ever happens
Planning a retirement career isn’t about giving up on more traditional retirement. It’s about being ready for what ever happens. We’ve all heard the saying, the best laid plans of men and mice go awryâ, and that can apply to long term financial planning as well.
The Bible tells us as much. In the book of James we read:
Now listen, you who say, Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.â Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes. Instead, you ought to say, If it is the Lord’s will, we will live and do this or that.ââ”James 4:13-15
Retirement isn’t a magical time when all the cares of life disappearâ”the unexpected can happen any time in life. Some of what can force you to work into retirement might include:
- A stock market crash just before retirement
- A stock market crash during retirement
- A job loss that forces you to make early withdrawals from your retirement savings
- An adult child or family member who needs direct help
- A series of bad investments (heyâ”nobody’s perfect!)
Planning for the future is about planning for uncertainties; that’s what planning a post-retirement career is all about.
Is a post-retirement career part of your retirement planning? What kind of work to you think will be the best fit?
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Written by Kevin
With backgrounds in both accounting and the mortgage industry, Kevin Mercadante is professional personal finance blogger, and the owner of OutOfYourRut.com, a website about careers, business ideas, money and more. A committed Christian, he lives in Atlanta with his wife and two teenage kids.
