Do This In Early Retirement To Boost Your Savings

Finally arriving at retirement is a wildly fulfilling feeling. When you cross this threshold and have both the working years and saved resources to hang it up and relax, you can bask in the glow of your hard work. But while the transition can be immensely satisfying, it's not always all that easy. Many workers find the move from working every day to relaxing all the time quite stressful; and that's to say nothing about the financial planning involved in launching a fiscally sound retirement.

Suggestions place retirement savings goals at approximately 10 to 12 times your annual salary at retirement age, meaning an American household earning a median income ($80,610 in 2023 via the Federal Reserve Bank of St. Louis) should aim for $886,710 in total retirement asset value — or 11 times that annual earnings figure. It's certainly not a simple feat to amass nearly $1 million in saved assets (although compounding interest plays a big role in the process), so many people opt for an augmentation in early retirement.

Rather than completely leaving the workforce, you might think about delaying your retirement by taking on part-time work. There are actually numerous reasons why continuing to work later in life is beneficial, from the financial boost to the not-so-obvious health advantages and social satisfaction. If you do continue to work early on in your retirement years, you can achieve a significant lift to your overall experience in these golden years.

Firstly, the financial component to maintaining an income early in your retirement speaks for itself. There's no substitute for being paid. The more you're able to earn, the less you have to rely on your investments to fund your lifestyle. Put simply, your Roth IRA, Social Security checks (which Dave Ramsey suggests an unconventional approach to maximizing), and 401(k) investments are designed to replace your salary and fund the remainder of your years. Delaying the start of these drawdowns can massively prolong their horizons and give you crucial years of additional funding. With people living longer these days, planning for a lengthy retirement isn't just a nice thought, but it's a critical feature of a stable portfolio that's built to last.

Shifting careers to work part time in a field that's always interested you is a great way to experience something new. Maybe you've always wanted to work in a kitchen or do legal research, perhaps it's a passion for auto mechanic work; regardless of your interests, there's a decent chance you'll be able to find someone willing to hire a part-timer to help them out somewhere in the field. Alternatively, an older worker might simply seek the easiest part-time employment around. This is a good approach as well, and by grabbing whatever job is available, you can always quit and move on if schedules start conflicting or you just don't like the tasks. Keeping your ear to the ground for new part-time work is important if this is going to be your entrance into the marketplace, however.

Not only is a steady (part-time) income in early retirement a quality augmentation for your savings and retirement investments, it can also prove valuable to your overall health. Numerous studies over the course of nearly a decade point specifically at a cessation of work as a major inflection point in lasting health and wellness (via Harvard Medical School, the University of Michigan, BMC Public Health, among others). It's unclear why this transition specifically correlates with increased levels of depression, worsening physical wellness, heart health issues, and even a higher incidence of death, though some research speculates it might result from a sudden disconnect from the mental load of work and the socialization it creates.

Working part time can reduce the stress associated with the greater level of responsibility you may have been accustomed to, offering a step down in your workplace demands without eliminating them altogether. This can be a major boon to your wellness alongside your wallet. For this reason alone, picking up a low-stress job to take up some of your time as you wind down your full-time career is a fabulous way to care for yourself in all aspects of life. It'll get you out of the house regularly (or at least virtually via remote work), provide a financial infusion that staves off your utilization of saved assets, and keep you interacting regularly with coworkers, customers, and others to stimulate your mind and body.