Taking on part- or full-time work in retirement will generate mixed reviews. While work can be fulfilling and engaging, time and energy come at a premium in retirement.
What makes this debate interesting isn’t that there’s a single correct answer — but instead, there are a few different lenses through which working in retirement can be viewed.
We’ll discuss two pros and two cons of working in retirement.
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Pros
1. Supplementing your nest egg can go a long way
Without making any predictions about stock market performance, the reality is that the economy currently faces a number of headwinds that may make future returns less than rosy. These include rising interest rates, inflation levels not seen since the 1970s, and still-overvalued stocks in certain segments of the market.
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If the stock market were to fall and not recover for a period of years, you’d likely have to draw on your portfolio at suboptimal levels. Depleting your stock portfolio when prices are low limits its ability to grow into the future, which may mean you eventually have to curtail your spending.
Working in retirement to earn even a little money can prevent you from having to sell stocks at inopportune times and can go a very long way in providing the lifestyle you’re hoping to sustain. Even part-time work — like two or three days a week — can have an outsized effect in protecting your savings.
2. Increased engagement
Studies have shown that retirees who stay engaged, active, and social tend to live longer, happier lives. Finding paid work that doesn’t necessarily feel like work can have several nonfinancial benefits that increase overall well-being, like more robust social engagement and a greater sense of identity.
This does come with one caveat: The job you choose in retirement can’t be one you’ve deemed to be unpleasant. If you don’t enjoy the work, the ancillary benefits won’t have a chance to reveal themselves. But working a job you do enjoy can come with a slew of positive aftereffects — not just money.
If you’re more engaged and find yourself happy doing certain work, you’re likely to live longer. Money aside, working in retirement is one of the ways to attain this goal.
Cons
1. High opportunity costs
As time passes, it becomes increasingly clear that there’s a lot more to life than money. If you feel you have enough income between personal …….