I Want to Retire. Don’t I?

There’s an old saying, “Be careful that you wish for”. The suggestion being, you just might get it and not like the result. The saying involves some irony. Put simply, there might be a big difference between your expectations and reality. Take an old maritime buddy of mine, I’ll call him Geoff. For decades Geoff has been a successful thoracic surgeon, working long hours and on-call many weekends and holidays. He loves the work and its challenges and successes, but he told me years ago that he and his wife, Jesse, planned to retire by age 55. They have saved and invested well over the years and are confident that they have more than enough to fund a long and fulfilling retirement, even if they both live into their 90’s.

Geoff and Jesse are both avid golfers and also love sailing, so they looked forward to an early retirement to indulge all of their sports dreams to the fullest. Their son and his family are nearby in Boston, and daughter and her family in a Boston suburb, they get to see them pretty regularly. With their two kids starting their own families, they’re excited to have even more free time in retirement to pursue their passions. That sounds like a dream retirement, right?

Unfortunately, it isn’t turning out to be so great after all. They are now 8 months into retirement, and Geoff is “bouncing off the walls”, as Jesse put it. They spent the first few months of retirement late last summer sailing up and down the east coast. They played dozens of rounds of golf. They ate out more, binge-watched a few cable TV shows and generally enjoyed their newfound freedom . . . for a while. 

Reality quickly set in, and Geoff realized that he was bored out of his mind. After getting up in the wee hours of the darkness for surgeries and pushing himself every day to be the best surgeon he could be, he realized that he missed having more of a purpose. Without his career, he felt like a part of him was missing. He decided that he wanted to go back to work, perhaps just part-time, so he could feel part of something again that energized him. Jesse was totally on board with it, too!

That got me thinking. Working in retirement is not a new concept, but it seems like many folks these days are planning to work later to help recoup losses in their investments from COVID, as well as beef up their portfolio in anticipation of continuing inflation and inevitable tax increases in the future. But in Geoff’s case, the decision to work again isn’t about money, it’s about feeling like you have a purpose.

Geoff is not alone. The decision to continue working in retirement is both personal and multifaceted. Various studies highlight the range of reasons behind such choices. Get this, a 2023 survey from Transamerica Center for Retirement Studies₁ found that 55% of people said they plan to continue working after retiring, citing both financial reasons and a desire for healthy aging, including staying active.

For certain individuals, pursuing a career beyond retirement serves as a financial lifeline, bridging resource gaps for both present and future expenses. Some may find it gives them a sense of purpose and fulfillment or helps them maintain important social connections. Others find it helps them stay mentally sharp, warding off the cognitive decline often associated with aging.

And luckily, when work is an option rather than a requirement, you can be choosier about the job you select – ideally, it will be one with less stress or anxiety. For example, you might consider tutoring students. Geoff chose this path so that he can pass along his medical experience and knowledge to hospital interns. He gets to explain the intricacies of thoracic medicine without the grueling hospital hours or on-call assignments. 

Do you love pets? Maybe consider animal sitting, dog walking or grooming. Love to travel? Consider becoming a travel agent and help others by recommending destinations, organizing itineraries and booking tickets for transportation, lodging, meals and events. For those who like to drive and enjoy meeting new people, there is no shortage of ride services such as Uber, Lyft and more. 

Any one of these jobs can help you avoid tapping into your retirement funds, and possibly delay taking Social Security benefits to allow them to continue to grow until they reach their maximum at age 70. Keep in mind, however, that if you’re taking Social Security benefits while working, there are a few things to keep in mind. 

Once you start Social Security, the government sets limits on how much you can earn, depending on your age. If you’re younger than your Social Security full retirement age, you can earn up to $22,320 in 2024. Social Security reduces your check by $1 for every $2 you earn above that annual limit. In the year you reach your full retirement age, you can earn up to $59,520. Social Security reduces your check by $1 for every $3 you earn above the limit, but only counts the months until your birthday. After you reach your full retirement age, work income no longer reduces your Social Security check.

Now, this reduction isn’t lost money. Social Security carries the benefit forward to give you a larger check later in life. Still, retirees can have their budgets thrown off because they were counting on the entire check plus their work earnings.

There are probably as many reasons for continuing to work after retiring as there are working retirees. As retirement approaches, ask yourself if you’re ready to cut off the working world completely – or perhaps keep your foot in the door with a job of your choosing. You might find that the retirement you’ve wished for isn’t all it’s cracked up to be.

So as always - be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, and Mansfield, MA. Insurance offered through its affiliate, CutterInsure, Inc.

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