07 Sep 2018 In Defense of a Working Retirement

On Sunday, this “news” came out that Geoffrey Owens–an actor who had a recurring role on The Cosby Show–was spotted working at a Trader Joe’s somewhere in New Jersey, and then shamed for it. The sentiment seems to have been something like, “Poor Geoffrey. If only his former fame had produced a more lasting fortune and the associated work exemption that would make him a happier man by any objective standard…”

And on Monday we celebrated Labor Day, a holiday which has its origin in the labor movements of the late 19th century (the first Labor Day was a strike!), when workers–many of whom were children–were working 12+ hour shifts seven days a week.

71% of American investors say that Retirement is their primary reason for investing. Anecdotally among our client base, I’d say the number is at least that high. And it makes sense, doesn’t it? To be able to live independently without a paycheck (or at least with a greatly reduced one) requires a bunch of money!

But there’s something else there that I think we need to be careful of, which is the assumption many of us make–consciously or otherwise–that work is a necessary evil, an assumption that then leads us to ideas about retirement that can be really unhealthy for us, both while we’re still working and once we’ve stopped.

For starters, working in retirement can be a really healthy thing for your finances, as each after-tax dollar earned from employment is a dollar you don’t have to withdraw from your portfolio, allowing it to continue growing and/or avoiding the lock-in of losses. Furthermore, working may give you access to other benefits, like health insurance and the ability to contribute to a 401k, and the income you earn in your retirement years even has the potential to increase your Social Security benefit when you start taking it!

The financial benefit of continuing to work in your retirement years is something many people will find to be a necessity, as for a whole host of reasons they may not have saved “enough” to support their retirement. But it’s important for those with more flexibility to understand that continuing some form of work in your retirement years can be a real financial boon!

The other part of this discussion has very little to do with your finances, at least directly, and that’s the somewhat lost truth that work is important. There is something about work that exercises muscles which can be integral to our mental, social, physical, and spiritual health, delaying cognitive and physical declines in much the same way a regular paycheck can delay portfolio decline.

Given there are certainly work environments that can be toxic and unhealthy enough to retire from at almost any cost, it’s important to remember that these benefits aren’t predicated on your continuing the same job into perpetuity. Since you hopefully don’t have to work in retirement for financial reasons, you should view your retirement with a freedom to pursue work that interests you in some form or fashion. It could be working in the public school system, or getting a part time job at a hardware store, or working in a consultative role for a non-profit using your years of expertise. It could be anything!

As for Geoffrey Owens, he’s got the right idea. In an interview after the whole craziness with him being shamed for working at Trader Joe’s, he had this to say:

“What I hope continues to resonate is the idea that one job is not better than another. A certain job might pay more, it might have better benefits, it might look better on paper, but that essentially one kind of work isn’t better than another kind of work, that we reevaluate that whole idea and we start honoring the dignity of work and the dignity of the working person.”

Our desire for clients is not only that they be financially prepared for retirement, but that they be wholly prepared. How work may or may not fit in with that transition is one of the more important points for us to consider, and we take that very seriously. As always, if you have any questions about what it could look like for you to continue working in retirement, please let us know!