7 Reasons Not to Retire, Part 1

I've written a whole lot about retirement: how to save for retirement, when you should retire, setting your retirement number and on and on. I've even addressed the issue of IF you should retire or not.

Well today, we're going to start a series from US News and World Report that tackles that last issue head on. In fact, it gives seven reasons you shouldn't retire. It starts with this one:

It literally pays to work, and money can buy peace of mind.

Their summary of this issue:

A big reason it pays to remain on the job is that work literally pays. No matter how small the income your job generates, it will help stretch your resources to fund a longer--and probably better--retirement. "Even a couple of years can make a huge difference," says Patricia Brennan, president of Key Financial, a planning firm in West Chester, Pa. Glenn Kautt, president of the Monitor Group, a wealth management firm in McLean, Va., says that "it's like a 2-to-1 factor." For every additional year or so of work, he says, you can extend your nest egg by two years.

Wow, that's a pretty good financial deal. But why is it so good? There are several reasons:

• Working longer gives you more time to save.
• You can delay taxes.
• You can delay tapping Social Security.
• Working longer shortens your retirement.
• You can reduce your withdrawal rate in retirement.
• You can maintain your healthcare coverage.
• Working longer gives you greater flexibility. 

Here's the last word on the issue:

The bottom line: The first few years of retirement are the most critical in preserving your nest egg. Yet the only way individuals can truly safeguard their savings is to be willing to work through choppy times in the investment markets. The good news is, many older workers today are more than happy to do just that.

This is what I plan to do. As I approach retirement, I hope to downshift and take a job that not only brings in some income and maintains health benefits, but one that also helps me either 1) give something back to society or 2) enjoy life more (like working at a bike shop). :-)

How about you? What's your plan? Are you thinking of something similar or are you going with the opposite and hoping to retire early?

Click here to read part 2 of this series.

Comments

[traineeinvestor]

One of the (many) dangers to a retirement plan is a below average or negative return on investments in the early years of retirement - especially if you are also drawing capital to fund retirement expenses. Working a bit longer (full or part time) can make a huge difference to the number of years your retirement savings will last without compromising your chosen lifestyle.

There are of course many other benefits to working longer, including the ones that you mention. I would add mental stimulation and social interaction to the list as important reasons to either keep working or find something else that will occupy your mind once you quit the rat race.