Funding Retirement: "Keep Working" May Make Sense, but Isn't Always Practical or Realistic

A few good comments on my post titled Don't Retire, Keep Working which suggested that one way to extend retirement funds is to, well, not retire. It's not a bad plan as staying at work not only has financial advantages but also physical and mental benefits. However, it's not always practical or realistic (after all, people do get older and many CAN'T work any longer) as pointed out by the commenters. For instance, here's what the first commenter had to say:

Unfortunately a lot of the financial sites are now touting the strategy of working longer as a fix for not having enough retirement money. You can never know when an injury or layoff might force you out and ruin your plan. A fat 401(k) in the hand is better than a well-paying job in the bush.. Or something. =)

I agree 100%. I would never want to bank on working longer as part of my financial plan to fund retirement. My preferred option (and recommendation) is to save for retirement as if you planned to never work again, then, if you can, keep working (maybe in a field you've always wanted to work in). This has the benefits of making your latter years enjoyable, extending your finances, and keeping you active. And if you can't work at some point, money won't be an issue as you've already got it all saved.

The second commenter had a similar viewpoint:

I am a big fan of the idea of keeping active when in retirement. This includes working. The benefits of keeping physically and mentally active are huge. Personally, I think I would go insane if I did not have something to keep myself occupied.

I am hugely opposed to the idea that working is a means of financing retirement. In my rather simplistic view of the world, if you have to work to make ends meet then you have not retired - you are still working. People who plan to rely on work to finance their retirement are taking a huge risk on their future health and a number of other factors.

Yep. I agree.

Finally, the last commenter added some thoughts on long-term disability and care insurance:

If you can work, that is terrific. Nothing will serve you better than a plan with some long-term disability and LTC insurance.

If you never need the policies, you can do whatever you desire along with having financial peace of mind. If you do have the insurance and need it, you can do what you are able to do with much less financial concern.

Good points. I currently have disability insurance but don't have long-term care insurance yet (I have detailed the six steps to buying a long-term care policy). It's certainly on my radar screen, though, for future years.

Comments

[prlinkbiz]

It's funny- I have friends who are young (29, 32, 34, 46)and "retired" due to the business and investments. It was fun for a while, but then they got bored. So they went back to work! Only this time, they had the resources to e able to choose how, when, where and why, so wokring became a whole different thing. Working shoudn't fund retiremnt- how discouraging! Working should fund investments- make your money work harder so you don't have to.