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Thayer Partners Blog

Retirement Planning Tip: Start Thinking about Part Time Work Now

[fa icon="calendar"] Mar 18, 2016 9:00:00 AM / by Chris Wilmerding

Chris Wilmerding

Retirement_Planning_Tip_Start_Thinking_about_Part_Time_Work_Now.jpgUnder-saving for retirement is a big concern for most Americans. With the average cost of living going up as well as the average life expectancy increasing, many Americans fear the worst: that they’ll outlive their savings. It’s a real concern that you should take seriously. After all, you probably do not want to depend on your children to take care of you financially in old age. However, it doesn’t have to be a constant worry. If you take charge of your retirement planning early, you can create sound strategies to ensure that doesn’t happen. And one of the best back-up plans you can have is to work part time in retirement.

If you don’t have the funds to save considerably for retirement, then part time work is a no brainer, especially if you’re healthy. Here are the benefits to consider when thinking about part time work during your retirement planning.

Stave Off Boredom

After 30+ years of working steadily, you might want to retire, but eventually, a full retirement can get boring. Having nothing to do all day, every day can lead to mental and physical atrophy. Finding a part time gig that you love—or at least like—that is either similar to your profession or just something you’ve always wanted to do, can help you remain active and engaged during your retirement years.

Pursue Your Bucket List Items

If you’ve under-saved for retirement, you might not have the funds required to do everything you’ve wanted to do once you retire. You might not be able to afford new hobbies, go on trips overseas, rent a cottage in a warmer climate, or do any of the other exciting things you’ve planned for on your bucket list. Having the extra funds and time to do these activities can make your retirement more enjoyable.

Less Money Stress

If you’re already planning your retirement, you probably have a lot of money stresses on your shoulders, constantly worrying about saving enough. Thinking about part time work now can take a lot of this stress off of your shoulders. If you plan to continue working until you’re 70 and then plan to continue working part-time for another 5 to 8 years, you’ll be a lot more confident that you won’t run out of money. Any little bit of extra income will help, even if you have several streams of income already settled during your retirement planning, such as Social Security bonds, and savings.

As we mentioned above, the higher cost of living due to inflation and the increased life expectancy in America makes running out of money during retirement a real risk. Healthy retirees who work part time can get the extra income they need to live the comfortable lifestyle that they’ve always dreamed of, without the stress of money looming over them.

Increasing Your Retirement Benefits

Another financial benefit of working part time is that it allows you to improve your earnings history, which will increase the amount of Social Security you can claim. In addition, because you’ll be getting additional cash flow in early retirement, you might be able to delay claiming your Social Security benefits for several years, allowing you to increase them by up to 8% every year past your full retirement age. If you can delay drawing from your retirement accounts, there is the potential for those funds to keep growing. Due to the power of compounding, delaying an extra few years can be extremely valuable.

While retirement planning, you must take a wide variety of factors into consideration, and part-time work should be one of them. By considering part-time work early on, you’ll be able to better plan your retirement income.


Topics: Retirement Planning

Chris Wilmerding

Written by Chris Wilmerding

Chris Wilmerding is Principal of Thayer Partners, an independent investment management firm located in Westwood, MA providing financial planning and wealth management counsel to individuals and their families.

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