To Work or Not To Work: No Longer the Sole Retirement Question

Retirement is changing.  The idea of retirement is no longer a binary decision of choosing to work or not work. The idea is increasingly morphing into a discussion of flexibility. When can I afford to scale back? Can I do it sooner rather than later? What was once seen as “retirement planning” has moved more towards “career planning.” This has created new financial planning challenges, along with new opportunities.

The notion of retirement as a significant period of leisure at the end of life is a pretty recent phenomenon, only becoming widespread after World War II. With life expectancies increasing, so are the years you will be spending in retirement. People still want a sense of purpose and to feel intellectually challenged, even as they move beyond what has been seen as a normal retirement age.

This re-envisioned balance between work and leisure can take on many forms:

  • Taking on a reduced workload or different role with your current company
  • Pursuing an interest completely outside of your profession
  • Consulting
  • Starting a new business
  • Going back to school
  • Volunteering

The list of possibilities is as broad as your creativity.  You can design the work-leisure balance that you want to feel fulfilled. If one of these scenarios is a serious possibility, or you have your own version, it should be accounted for as part of your financial plan.

Questions to consider when you dial-back or make a career shift:

  • How much will healthcare benefits cost? Will you still have coverage if you work part-time?
  • How will this change impact your ability to save? Will you still be on track?
  • How much can you afford to invest in a new business or additional education?
  • Is the decision permanent or do you have the option of re-entering your old position, industry or company?

This doesn’t mean that a retirement of leisure is off the table. A more traditional retirement will still be the goal for many. The point is this: put some serious thought into how you envision your lifestyle because it is likely not going to be an off-the-shelf answer. The earlier you can start defining what the future may look like, the sooner you can start planning for it.