It’s Easy to Stay

It might seem odd to say this, but I’ll say it anyway: it’s easier to keep working than retire.

I know it’s a bit obvious in some respects, but I find with all our talk of retiring early on this blog perhaps we should revisit the other side of the equation.  What happens to your retirement plan if you just keep working?

Well the good news for all the people that worry about saving enough money, is that every year you keep working the lower the risk you have of running out of money.  It’s sort of a three fold compounding that occurs since you are living off your work income, you are still contributing to your accounts and your investments keep growing.  Also you are at the very end of your savings cycle you are at peak investment compounding so if you ride this out for a year or two longer it can significantly stack the deck in your favour.  For example, if I keep working at this point my net worth keeps climbing by roughly an extra $100,000 a year.

Another positive thing of keeping working is you can finish up any key projects you are involved in at your job. I actually knew a few guys over the years that planned on retiring after they finished up their last big work project.  This provides some sense of closure at work since you are not leaving mid-way on something and also lets you feel like you have left a bit of legacy behind you.  Both can be important depending your personality.

Another advantage of not leaving work is you get more time to prepare key people in your life,like your spouse, for the change .  So you can talk more about the change retirement will bring to your lives, buy any key items they feel you need, or add a renovation project prior to leaving.  What ever support they need to help sleep at night you can help with since you are not in a rush to leave work.

Then perhaps the most obvious reason of all: staying at your job is the path of least resistance.  You don’t have to explain your retirement plan to anyone, you don’t have to justify your choices or go through the emotional upheaval of retirement.   You can continue along in your life if you are enjoying it.

Perhaps the only downside to keep working is well: the work.  If you don’t like what you are doing it can seem more like a prison sentence.  Also you lose out of another year of freedom to do what you want.

Overall, I understand why people add an extra year or two to their initial retirement goals.  It is very easy to do compared to actually having to retire.  So would you keep working an extra year or not?

9 thoughts on “It’s Easy to Stay”

  1. Back in 2008, when I was nearing my planned early retirement, I chose a final date to coincide with my best guess as to when I would finish the one project I was working on. I was working only 2 days a week at the time, so I worked on very little else. I barely finished the project on my final day, less than an hour before quitting time.

    Working only 2 days a week, my income was pretty low, so working another month or 6 months or a year would not get much extra money. I had been dropped by my company’s health insurance plan (I am in the USA and this was before the ACA) already so there was little incentive to stick around.

    Had I worked another few months, I would have ended up with less than had I left when I did. You see, the markets were crashing in late 2008 and I planned on cashing out my company stock and investing it in a bond mutual fund so I could live off its monthly dividends. The company stock had not yet taken a hit, so retiring later would have netted me less at cashout time, not enough to offset my meager after-tax earnings.

    Also, leaving at the end of October spared me from having to suffer through another awful winter of commuting.

  2. I think you make a great point about it being easier to stay than to go for many of us.

    My goal is to retire early in four years when I am still in my 40s, but being conservative by nature, I could see myself falling into One More Year Syndrome, and convincing myself that another year of savings will make retirement even more secure. If this happens to me, I guess it will be a good problem to have, since it will likely mean I have met my financial goals and am still enjoying what I do for work enough to stay!

  3. I hear exactly what you are stating. I’m 44. In 3 years time I should be at a 5% WR which should be fairly safe. If I work another 2-5 years past that point though I’ll be fairly rich.

    It’s tough to know what to do. It’s not just the money as well. It’ll mean that there will be basically no risk in relation to money problems in the future plus it means that I’m not facing a big change which is retirement.

  4. I would take a year off with and consider the option to return to work after that. The thing is, not much changes in one’s skills in just one year, so it would probably be not that difficult to find another job or even go back to the old one, given one has connections and a professional network at this point. For myself, I know exactly what I would do: look for land to buy, grow my orchard and develop my garden gradually. Isn’t there something that you are passionate about, something you just can’t wait to do? Also, just wondering have you read any Rich Dad Poor Dad books? And if so, was there a reason you chose not to invest in real estate? Thank you for speaking so openly about your journey, much appreciated.

  5. Oh, the “One more year syndrome”
    One thing you can always do is earn money somehow if need be down the road. But you can’t earn more time. Also, in Canada – there are always social safety net programs to catch you, in a worse case scenario. The fact is, there is never 100% assurance your plan will work out – any plan whether you work longer or not. You could also drop dead in a year (just saying, it happens)

    Sometime you just have to jump in.

  6. The title definitely caught my eye. I was originally going to leave my job last year. I was fried but knew it would leave some coworkers in a tough spot. Instead, I moved to a part-time schedule (3 d/w). It was a very good decision. I was able to tie up all of my projects, stock up a bit more money, and reaffirm my decision. When I leave later this year, I will have no second thoughts.

  7. Working each extra year costs you two years. One more year of work and one less year of retirement. I’m not immortal, so I left as soon as I could.

  8. Hello Tim,

    For me, retirement is not yet occur in my mind. It’s not about money but it what makes me happy. I think if you love your work and what you’re doing, then it is not easy to let it go just because you already save enough for your retirement or whatnot. On the other hand, I still believe that if you think you’re not doing any good with your work and you need to breathe a fresh air, just leave anytime soon.

  9. While I do understand your point of view, I very much agree with Rick’s comment.

    The truth is, unless you’re self employed, working extra often means you’re sacrificing your own time (1, 2 or even more years) for a company that already plans to replace you once you retire.

    Working a couple more years to secure a better income for retirement is understandable, but only if you really need to.

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