Category Archives: Retire Often

8 Tips for Setting Up a Home Office on a Budget

Income Streams, Retire Often, Working In Retirement

This article was contributed to Leisure Freak by Michael Everett, who is a chemistry teacher with a passion for house design.

Whether you’re a worker who switched to working from home or a freelancer working after retirement, you’ll need a comfortable working environment you can call your own. Although this space is essential if you want to remain productive, that doesn’t mean you will need to burn a hole in your wallet designing it. After all, not everyone has enough space for a separate room or enough of a budget to get help from professional interior planners. Luckily, you can do it yourself with the help of some of our tips. Don’t worry; these eight tips for setting up a home office on a budget won’t compromise your wellbeing. They will help you remain frugal, comfortable, and happy.

A woman working at her desk in her home office, writing something in a notebook.

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1- Create a budget beforehand

As with any other home design endeavor, you must create a budget. This will not only help you better understand how much money you can spend, but it will also enable you to control your impulses while making purchases for things your workplace needs. Go through your monthly expenses and put aside the money needed for this project. Be realistic about it, and do not spend more money than you can comfortably handle. This budget is the foundation the rest of the tips will significantly depend upon.

 

2- Designate a spot for your home office

As previously mentioned, you most likely won’t have enough space in your home for a separate home office. This is perfectly alright! Even a tiny, peaceful corner of your living room will do. On the other hand, if any of your other rooms have an odd spot you cannot seem to utilize, why not transform it into a cozy working area? Walk around your home and think about where your future office space would make the most sense. Opt for areas that have less traffic and are less noisy to stay productive even when working from home.

3- Remove any unnecessary items

A great tip for setting up a home office on a budget includes decluttering. Decluttering is an accessible way for you to maximize your home office space. Furthermore, it may even earn you some money! Clear out the space in your designated home office by either selling, donating, gifting, recycling, or throwing away any unnecessary items. However, you may rent a storage unit if you’re not ready to part with some belongings. It is also one of the top reasons why Americans rent storage units in the first place. You can use it when working from home and still keep an eye on your belongings. Alternatively, it will also give you the chance to deal with them at a later time.

4- Prepare a floorplan and a list of the necessary items

Preparation is vital if you want to reduce the number of funds you spend on redoing things you’ve done wrong. Measure the area you will turn into a home office and create a precise floor plan. Additionally, make a list of items you want in your new home office. This list should be categorized so that the absolute essentials are separate from things you may want but not need.

Some of the most notable essentials are:

  • A surface to work on
  • A seat
  • Devices such as computers, laptops, and tablets
  • Office and specialized equipment

5- Repurpose, bargain, DIY, or trade for needed items

We do not advise buying new office items straight away, even though you might be tempted to. Be creative and choose either DIY projects or repurpose old furniture or objects. If you have an old table that needs a bit of love, why not give it what it needs and save yourself some money to spend on other things? Also, do not neglect the benefits of used items! They are always more affordable, and you may find some hidden gems. For example, used art tools can be quite beneficial if you plan to start earning from your hobbies. Lastly, if you need to purchase items, always look for ones that are on sale or that you can bargain for.

6- Do not forget about ergonomics

Remember to take care of your comfort and wellbeing despite your desire to cut down on anything unneeded. After all, you will use your home office for many hours during the day! If your monitor is not at eye level, reuse old boxes or books to prop it up. On the other hand, if your chair is uncomfortable, invest in one that is more ergonomic. Whatever is troubling you shouldn’t be disregarded. Keep a close eye on how your home office makes you feel and make any necessary adjustments.

7- Decorate using items you already have

The decor you use in your home office is one of those things that can not only satisfy your eye but may also inspire you. And who doesn’t need a bit more extra motivation to work? You can choose different decor based on your style and budget. We suggest using whatever items you already have by giving them a new purpose or space. Place a clock above your desk to monitor the time or plenty of lovely photos to calm your mind. Plants will add a sense of life, quotes may motivate you, and candles can make your home office smell divine. If you ever decide to purchase something, keep in mind the mentality of “I deserve it” can be harmful if brought to an extreme. Especially if it makes you purchase more items than you may need.

8- Let the light in

While designing a home office, you may forget about an essential factor besides peace and quiet, and that is light. Good lighting can make or break your working mood and create a different ambiance. Make sure to have at least one source of natural light in whichever space you decide to set up your home office. Use mirrors and lighter hues to make the light bounce about the room. However, you most likely will require additional light sources. A good light, whether it is a desk, wall, or floor lamp, will help you stay focused and avoid eye strain. We suggest using lamps you may have already if you’re working on setting up a home office on a budget. When possible, pick those whose intensity can be altered and that do not add glare to your devices. 

 

Thank you Michael Everett for your insights on creating a home office on a budget in a time when work from home opportunities are very attainable.

Author Bio: 

Michael Everett is a chemistry teacher by profession but a passionate house designer at heart. He has been sharing his knowledge as a self-employed content creator for numerous websites, including Zippy Shell Northern Virginia. His favorite hobby is spending time with his cocker-spaniel dog named Ruffles.

Semi Retirement? What I Loved About My Scaled-Down Retirement Jobs

Financially Free, Retire Often, Working In Retirement,

Looking back over my early retirement there was a lot to love about my scaled-down retirement jobs. Right from the start of my journey to FIRE, my plan was to be open to paid work in early retirement. What some people refer to as semi retirement, I happily called what I was going to do “retiring early and often”.

For me it was all about being able to pursue interests. Interests that my long career wouldn’t allow me to do. That and shedding some of the stuff I didn’t like doing. I looked forward to accepting opportunities for just as long as I wanted to do it. That, and also gain the life flexibility I had sacrificed over the decades while serving the corporate world system. Basically, my paid work in retirement will be a rewarding adventure or it isn’t going to happen or continue. Here’s some of what I loved during my retirement work experiences. 

Semi Retirement? What I Loved About My Scaled-Down Retirement Jobs

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The Best Parts About Working Scaled-Down Retirement Jobs 

Done right, being open to taking on scaled-down retirement jobs has only upsides. Everyone will have to decide what “done right” looks like for them. I set my own working in retirement guidelines and stuck to them to leverage the work experience in my favor. Aside from getting to meet and work with some awesome people, here’s what I loved most:

Money wasn’t my motivation, it was learning and doing something I had interest in –

I had established my retirement funding to cover things regardless of my working. Anything I earned would be added to our overall net worth, not increasing our budget or spending. It freed me to purposely target opportunities based solely on interest. I could ask myself, if money was removed from accepting this position, would I still want to do it? There are some things, like herding cats (project management) that no amount of money could get me to do. 

This mindset also made it easy to decide when it was time to end the job experience. I retired early again without hesitation from an encore career that paid more than my first long career. This mindset provides empowerment. No longer shackled to unrewarding work, unreasonable management, or a toxic work environment because of the need for a paycheck.

It allowed me to experience work in a different way as a paid observer. I was only there to perform my duties and absorb all I could without the pressure of attempting advancement for monetary reasons. I was able to learn, experience different interests, be rightfully paid, and simply move on once the itch was scratched.

The ability to leave it at the end of the day and not take it home –

My long telecom engineer career included 24×7 on-call. But worse than that was having to continually think about it to stay ahead of problems or plan ahead for the next day. What I enjoyed most about my scaled-down retirement jobs was being able to leave it all there at work. It was no longer my job to take care of the world. That was left for the career driven go-getters who still needed to. 

The pleasure of having absolutely no pressure to over perform –

During my old career we had monthly accomplishment meetings with management. Where it was all about the question, how have you performed over the past 30 days? We had to prove our worth to keep our job and add to or subtract from our annual appraisal metrics for salary treatment. Make a measurable mistake or underperform in the last month of the year and they gladly erased all previous accomplishments that year. In fact, any poor performance month was used as a reason to withhold a raise. There was none of that pressure in my scaled-down retirement jobs. If there was, I wouldn’t have accepted the position. 

I vowed to be reliable, do my job, and learn all I could from the experience. No more sacrificing my personal life or covering for incompetence, outdated and overworked software/hardware/machinery, or doing more than I really wanted to do. When I did go above and beyond it was because I really wanted to help out. Not out of some obligation to do it or an attempt to avoid feeling the sting of management’s retribution.   

Being able to refuse accepting the thieves of personal life: On-call and overtime – 

Turning down every offer of taking an on-call duty, working a nonscheduled weekend or holiday, and any overtime was a whole different feeling of freedom. This also endeared me to my coworkers who were hungry to earn extra money and saw me as someone not competing against them for that. 

Free from legacy obligations – 

Being new on a job means everything now touched is fresh and new too. In my long career there were a lot of things touched and worked on. Management created a fix-it-fast culture where they didn’t care who was really responsible. That meant anything worked on over the decades that broke, even when it was outside current job responsibilities, it still ended up in your lap because nobody wanted to take the time to learn or own it. Losing and no longer bogged down with legacy work history was a refreshing aspect to my scaled-down retirement jobs. 

It wasn’t about money, but I still loved padding net worth while enjoying a retirement job –

Who wouldn’t love adding money to their portfolio while having fun working on their terms? Even my lowest paying retirement gig went towards our overall net worth. I had retired early with a modest mortgage that we had refinanced to get the lowest budget friendly payment possible. I was able to pay that off from my earnings over an 18 month retirement job stretch.

During one short contract I was able to divert almost all of my earnings to the 401k to approach that year’s federal maximum contribution allowance. It deferred taxes, reducing it to near zero on earnings other than Social Security/Medicare withholding during that earnings stretch.

It Wasn’t All Smooth Sailing, There Were Some Challenges To Retirement Job Bliss

Time off and vacation time offered, but with a catch –

After spending decades at the same company in my first career I was caught off guard by how my scaled-down retirement jobs managed employee time off. They didn’t. For all my corporate based retirement gigs it was put on the employee to make sure either the shift was covered or have a full backup person cover you. Difficult to do when everyone is already stretched to their limits with work.

We still traveled and vacationed while on these retirement gigs. I found it an intimidation strategy to get career driven employees to not take their vacation benefits. Getting time off under their rules was a challenge. I admit that because of my retirement work mindset where there was no financial fear of dismissal that I may have circumvented their time-off process a few times. 

Scheduled to work weekends and holidays –

I accepted that I may have to work weekends and holidays as long as it was fairly assigned. It was tough to be unavailable to be with family when they were off work whenever I was stuck fulfilling my duties. I did experience having to work an early morning Christmas shift for the first time in my life. It went by fast and I kind of enjoyed the quiet day. We had already planned Christmas with our kids and grand-kids later that day anyway.

Unfortunately that Christmas the entire next shift  of 2 called in sick (they weren’t) and I refused to work a double on Christmas. Somehow I was in more trouble than those fibbing illness. Turns out it disturbed my manager’s holiday. It was nice having that conversation with my boss the following day. Reminding him that I did my job duties and it wasn’t my job to make it easier for him to manage his people and the business. The joys of financial independence in all its full glory. 

Income taxes were a handful – 

To fund my early retirement in my pre age 59 ½ days I was living off of Sepp 72t IRA distributions. Something that I couldn’t turn off without IRS hassles. I then banked all work earnings, taking advantage of 401K opportunities when offered, use of IRAs, CDs, and a savings account. I had 10% federal taxes withheld from the 72t payments and I claimed Zero at the single higher rate on my work W4. With all of that I would still owe a big chunk at tax filing each year. 

The longer on the scaled-down retirement job, unwanted legacy work obligations creep in – 

The longer I worked a retirement gig, its own legacy work obligations that I had gladly moved beyond from began to show up again. There will always be some undesirable work that people will drag their feet doing. If you have proven success with it then management will pile it on you to make their life easier. It’s the nature of most jobs where excrement rolls down hill. It’s one of the reasons that added to my decision to end what I call my encore career. I wanted to learn and experience my interests, not carry operational BS because new or full time people didn’t want to do it and management just wanted it done without disturbing their own bliss. 

Management trying to add unwanted scope –

When I was hired for my scaled-down retirement jobs it was well detailed what I used to do. They even mentioned the “overqualified” issue. I selected opportunities based on what I wanted to experience. I made it clear what I was there to do because I wanted to do it. My retirement jobs were perfectly scoped based on my being rationally unreasonable about that. But they can’t help themselves but to try and change the scope or rules. Sadly that doesn’t work for them once you are happy to call the relationship over if pressured to accept it. I did have a 4 month stretch until my contract ended where a new manager was unable to accept this dynamic and created a slightly hostile environment. 

Turning down extra shifts, overtime, etc., on occasion caused some conflict with management – 

Most of the time there was a ready supply of work go-getters willing to snap up any opportunity to make more cash. But when there wasn’t, my response of “no thanks” to their requests was less than acceptable. I hate to admit it, but they paid the price for my pre-retirement decades of work abuse and my unrelenting desire for a balanced working-in-retirement lifestyle. My refusals were always done with a smile and soft tone.

My Retirement Gigs Didn’t Last Forever, Nor Meant To

The list of my paid retirement work isn’t vast. I retired early at the age of 51 from a traditional and ravaged Bell System company as a lead engineer. 

I took some months off and my desire to learn wireless technology guided me to a Wireless (Cellular) company Network Operations Technician position. 

My interests in cable technology and past experience led me to an opportunity to become a Video on Demand Systems Analyst. It’s what became what I consider my encore career. Even though it was going very well and paid more in salary than my first long engineering career I got all I wanted out of the experience and then retired again.

Months later I accepted a short Cable Telecom Systems Analyst contract. The recruitment came from some people I enjoyed working with before. It started as the best contract experience of my life. Once that project ended after 2 short months I was extended 4 more months for another project. It was a lesser experience but tolerable due to my set retirement job boundaries. 

Then one summer I worked as a Craft Beer bartender to help out in a small local coffee shop/Pub that I frequent. I worked during busy weekends and events. That was by far the most fun I have ever had while getting paid.

There were also some super short contracts that were more like paid tasks than anything else through the 11 years of my early retirement. 

Going forward?

I have no idea what I may try to do next or when I will do it. I’ve become extremely picky about work now that I have met my jobs bucket list goals. Maybe never, it doesn’t matter. But I do know I will frame any opportunity I do accept to be aligned exactly with what I want to do under the retirement freedom rules I created. 

I don’t consider what I do as semi-retirement. I believe that retirement is the absence of NEEDING to work, not the absence of working. What I consider “scaled-down retirement jobs” goes beyond having lesser responsibilities or salary. What it means to me is having a different mindset about it. Working on my terms, doing what I agreed and accepted that I would do, for as long as I want to without financial fear of losing the job or being forced into unrewarding situations.

I’ve had some fantastic and rewarding scaled-down retirement jobs over the years. They’re awesome because I set my own rules and I can leave before it can become a bad experience.

Because of this freedom to live this way, I’ve been simply retired since the first day I walked away from my long demanding career and during every one of my paid retirement opportunities since. 

My Early Retirement Was Never About Retirement

Financial Independence, Financially Free, Retire Early, Retire Often, , ,

Sometimes we have to adapt to difficult and changing circumstances. As people are being forced to reevaluate their retirement plans and careers, it’s easy to get hung up on the perceived safety of coloring within the lines of traditional definitions and norms. For many it may look impossible to figure out a way to financial security. Maybe a mental shift is needed and perhaps my retirement story will provide ideas. Even though what I did was characterized as early retirement, my leaving my career at the age of 51 was never about retirement. 

Everyone has a mental picture of what retirement is. I had a retirement image too and I knew that someday I would reach an age that the traditional definition of retirement would materialize. But that vision of retirement was decades away. My early retirement wasn’t that. Not even close. I wouldn’t accept that there was just one way to go. 

My Early Retirement Was Never About Retirement

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I Retired Early But It Was Never About Retirement 

I do understand why I got the heat I did about my early retirement not being considered retired. I’ve gone with a different solution to counter the dregs of youthful work life. I wanted to ditch the rat race much earlier than waiting until a traditional retirement age. So I adopted a “retire early and often” mindset. I then created and executed a plan to achieve it. Taking a different direction where I wouldn’t have to wait until old age or having a million dollars in the bank. 

My Employment Liberation Motivation

After decades of relentless and unrewarding work, living under the threat of downsizing and the resulting financial ruin it could cause me and my family, I was motivated to reach a point of employment liberation. A financial condition where I never needed to kiss Corporate-keister or if forced into long-term unemployment have to rely on stingy safety nets to survive.

By the time I decided to work towards early retirement I had already made an interstate relocation to keep my job. Then came the long days in the office, 24X7 on-call duties, business travel, and constantly increasing workloads. There were harmful economic market bubbles and the recession that cruelly added more grief by providing easy excuses to further hammer workers. Sacrifices were made for the workplace promises of something better later. But as I and many people know, you can’t count on corporate world promises. 

What My Early Retirement Plan Targeted

I knew from day one of my financial plan that I was going to retire early and often. I later found a retirement definition that better captured that same mindset: Retirement is the absence of needing to work, not the absence of working.

It all came down to deciding that I’d commit to saving enough to cover living expenses and be free to pursue opportunities of interest and passions. I would welcome paid work in my early retirement but only on my terms. I’d only accept work that meets my criteria and always free to walk away at any time without threat of financial ruin.

What I Did To Reach Employment Liberation

Instead of trying to save a million dollars or more, which at my salary would take me well into old age if ever, I decided to go a different route: 

  • Create a sustainable happy lifestyle without wasteful spending. A frugal lifestyle that may not have included months of exotic travel, expensive cars, or second homes. But it also didn’t include feeling like we were living a deprived life. It was all about simpler living. 
  • Ramp up savings to save enough to cover that lifestyle in retirement. 
  • Maximize income with eyes wide open to leverage wins in the corporate world’s game. 
It started with cutting waste from our budget. 

We adopted a smart frugal and balanced lifestyle. It does take time and practice to figure out what a sustainable and happy frugal lifestyle is. We perfected it during our journey to early retirement. It was the lifestyle we wanted to live before and in retirement. 

Next was eliminating all non-mortgage debt. 

That effort further reduced our cost of living, that reduced our required budget, which equates to less needed saved for retirement to support it. 

Redirect excess income into savings.

It was then all about ramping up our savings to hit the portfolio target sooner than later. Once expenses are cut more money is freed up to invest. There was nothing extreme in my early retirement story. Just the same basic stuff everyone else in personal finance talks about. 

Always recognize opportunities to increase income and continually gain marketable skills. 

This is an effort that we all should do in our careers. Increased income results in more money to save. Increased skills adds to increased income opportunities now and after early retirement. 

My efforts also required me to better play the corporate world’s game. 

I focused on what management valued. They happily load us down with important but non-valued work. All the things we worked hard to do but meant nothing to management during our evaluations for raises and advancement. Tasks that management seldom loaded onto their pet employees. 

That stuff ate time. Usually eating into our personal time and always taking time away from game winning opportunities. I used their own values to decrease my efforts on that segment of responsibility and put all effort into their home run values. 

I then used their own values to challenge any of their objections to my work priorities. It was clear that the issue comes down to every personal success I could leverage into better raises for me equated to management taking some credit and reward too. 

How I Viewed My Portfolio

I did run my numbers through a retirement calculator to get a feel for my success chances. As for how much I saved, I didn’t have the luxury of shooting for a sizable portfolio that would perpetually generate enough passive income of dividends and interest to totally live off of. I knew I’d also spend down assets as part of my retirement funding bucket strategy. 

I simply thought of early retirement as a condition of unemployment. Whenever I saved money I thought in terms of how many days, weeks, months, and years of being unemployed would be covered. This thinking continued even when working in my targeted retirement gigs. I looked at my earnings that same way as I set the money aside to increase my net worth. 

I just had a different early retirement vision.

It was always my plan to retire early and then freely pursue opportunities of interest that were outside of what my first career allowed. Once that itch was scratched, I would then go on to the next one when the opportunity to do so presented itself. 

I was also content to sit out doing any paid work at all. It was an early retirement plan born of the hope for freedom through employment liberation. That and being shielded from the economic cycles and the corporate world decisions that seem to always mess with the working class. 

I didn’t have the luxury of a fat salary to pad a huge portfolio. 

Although it sounds wonderful if you have the bucks, I never even considered an early retirement of nothing but pure leisure and neverending travel. To tell the truth, that wouldn’t appeal to me regardless of money. We travel as much as we want to but enjoy where we live. I didn’t have to work in my early retirement to live our lifestyle. But I planned on being open to opportunities. Knowing I would most likely take on a paid gig at times. 

Wrapping up-

What having this mindset and plan did was allow me to take on rewarding work in retirement that I wanted to learn and do. Since I stayed on a budget funded by my portfolio, I funneled all earnings back into my net worth. After 11 years of portfolio funded early retirement, with a few working adventures thrown in, I now have a fatter portfolio to go along with my ability to live a better and freer lifestyle. 

Retiring young means still having all of the energy, spirit, and discipline that brought us success in life and career. I’ve found that we’re happiest when we can direct that energy towards something we value. I simply took what I had saved, created a way to access it to fund our frugal living lifestyle, and freed myself to accept opportunities when they were available to me. My early retirement was never about retirement as it’s hardly what many would call a retirement. Not unless the same retirement mindset that I have can be accepted. There’s always more than just one way. 

Is Taking A New Job Without Mentioning Retirement Plans Dishonest?

Non-financial Aspects of retirement, Retire Often, Working In Retirement,

The Financial Independence Retire Early (FIRE) journey can be tricky. It’s necessary to maximize earnings, increase savings, and also land in the optimum lifestyle that we desire to live. Having these goals can come into conflict with what others either fairly or unfairly expect of us. So, is it dishonest to take a new job without mentioning retirement plans? Being honest during new opportunity interviews served me very well in the last years of my first long career and all of my retirement jobs. It’s a major reason for my FIRE success. Here’s why it’s not dishonest to withhold retirement goals.

Is Taking A New Job Without Mentioning Your Retirement Plans Dishonest?

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Why Mentioning Retirement Plans Isn’t Necessary In The Pursuit Of Opportunity

A prospective employer’s thoughts don’t usually fish around retirement related questions during an interview when we’re young. It’s more a subtle issue once we stroll into the age 50+ ballpark. Younger FIRE aficionados probably seldom encounter this issue. But it’s a good idea to be prepared for the possible ethical dilemma of whether mentioning retirement plans is necessary. There’s a cost for businesses to onboard a new employee. They have a right to feel they will get their money’s worth. But we also have the right to have our own goals in mind. 

Many people will have no problem with this issue. 

There is an understood truth that we are all at-will employees and nobody owes anyone anything. Unless of course there is a legally binding contract which isn’t usually an issue except at the executive level. But for a lot of people there is a hope that the new opportunity is a chance for a mutually rewarding relationship. Otherwise, why even do it in the first place? We shouldn’t start off intentionally disloyal or dishonest in the relationship right from the start. I know I don’t ever want to feel like a ruthless jackhole. I have to live with myself. 

My early retirement plan was to reach employment liberation by age 50. But that didn’t stop me from wanting to pursue opportunities up to and after the big day of freedom. Navigating around the issue isn’t that complex, you just need to be prepared. 

They Don’t Ask, You Don’t Tell

It would be a rare thing for a prospective employer to come right out and directly ask about our future retirement plans. If it comes it will be in the way they discuss their employment longevity desires. This could be a discussion about how their workforce has low turnover and people stay for many years. Or that they are looking for someone who is a great fit and will be a lifer with the company. There’s no deception in keeping your retirement plans to yourself. Just say how wonderful that sounds and how you would welcome working in that kind of environment. 

Before my first early retirement there was an internal promotion opportunity in another group. Something that would bring in more earnings to go toward my financial goals and a chance to learn and do something I had great interest in. I always embrace both flexibility and adventure. I saw it as a “let’s see what happens” opportunity. They didn’t ask about my retirement plans and I didn’t tell them. In the end, my job offer was first presented to my director by the hiring manager as a courtesy. My director decided that I would be marked as a kind of department franchise player and he killed the offer. I was brought in to be told about it, I baulked, and he offered me a raise to silence the issue.

I doubt I would have received that raise had they known of my coming retirement plans. He didn’t ask about any of my retirement plans and there was no dishonesty in not telling him.

Where Do You See Yourself In Five Years?

A lot of interviewers like to throw the where you see yourself question out or its numerous variants. There is a right way and a wrong way to answer what’s your future career plans question. It’s definitely ill advised to say it’s to retire in an xyz timeframe living the life of leisure. They aren’t concerned with that and are looking for answers related to career aspirations that will be an asset to them as it relates to the presented opportunity and their business. Obviously, focusing on the real reasons we are excited to go through the hassle of interviewing for a new opportunity is an honest answer. 

This issue along with dealing with the overqualified roadblock came up in my first stepped down retirement job. It was during the recession and I had retired as a legacy network telecom engineer and was applying for a cellular telecom tech job near my home. I’m sure they initially assumed I was laid off like so many others and would jump at a chance to return to a like titled job as soon as one came up. I had always wanted to learn about the wireless industry and all of my answers were truthful around that. Not that I was financially independent and flight risk at any time by retiring again. As long as the gig was rewarding I honestly planned on being there. 

Open Ended vs Fixed Commitment

Some opportunities are open ended, like we want someone to stay for a long time with us as mentioned above. Others have a fixed component. As in, we need someone to commit to finish this XX month or year project. In that case the ethical dilemma isn’t about spilling your retirement plans. But instead whether you can honestly commit to the timeframe regardless of any retirement plans

This was the issue I encountered when interviewing for my encore career. It was another opportunity of interest and passion. I was to support a huge video project at a major cable company with a specific minimum project time frame. My accepting the position without explaining my retirement status was far from the equation. I simply made the decision to accept the timeframe commitment. It was the best and most rewarding working experience of my life. After the project and another contract extension I ended up retiring again with no hard or dishonest feelings.

If It’s Heaven You May Change Your Retirement Plans, If It’s Hell Too

One of the things that I always thought about when taking a new job and not mentioning my retirement plans or status is that a lot can happen in the time there. Both good and bad. We can’t see into the future. The relationship and rewards can be so great that retirement will be gladly put off. Or it can go wrong and become obvious that the relationship has spoiled and needs to end. 

Nearly two years into my first retirement stepped down gig I had an opportunity to advance. I had actually done the job in my past and it was a step up from where I was there. Everything went great and the offer was discussed but as I was later told they decided to give it to a younger applicant because at my age of 53 I was seen as a flight risk. Nobody asked, nobody told, but the employer made their own assumptions. They were right. I left a couple of months later. But I will always wonder if I would have stayed there a lot longer had they not done that. I really liked working there but it made the decision very easy to leave and accept a new opportunity that came my way. 

Always Be Open To New Opportunities

Nobody ethically believes that people should never be open to new and better opportunities in their life. That shouldn’t end just because there’s a near retirement date in our plans or we are already retired and want to work. There is nothing dishonest in this. 

Retirement is the absence of needing to work, not the absence of working. Sure, it screws up the system of employment that depends on a financially desperate working class. But there are no ethical issues of honesty with our winning at their game. If directly asked about retirement plans then truthfully answer you hope to one day retire just like almost everyone else does. But right now I am totally excited about and focused on this opportunity. 

 

This issue is something I had to think about because I had always intended on retiring early and often. It was bound to come up. I created a lot of retirement opportunity boundaries to make sure any paid work I took on would be rewarding. The odds were already tilted in my favor because I didn’t need to work. I also didn’t need to have dishonesty be any part of it. In the end there is no legal obligation to mentioning your retirement plans. But we should still consider whether we are acting ethically and honestly. Not for them, but for ourselves.

Asked To Delay Retirement, Should You Accept An Offer To Stay? 

Non-financial Aspects of retirement, Retire Often, Working In Retirement,

It doesn’t happen to everyone, giving notice and being asked to delay retirement by your boss. What was once something limited to only those performing critical functions can now happen to anyone in today’s low unemployment environment. Then comes a big decision, should you accept an offer to stay longer? It isn’t always an easy question to answer. There’s a whole lot of financial and mental efforts to get to this celebrated moment of life called retirement. Only to find yourself on the spot questioning the right move to make. Here’s what I experienced and some of the things to consider before giving your answer.

Asked To Delay Retirement, Should You Accept An Offer To Stay? 

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Asked to Delay Retirement? What To Consider Before Accepting An Offer To Stay

My employer request to delay retirement moment came after my second early retirement.

I had always intended to retire early and often. Focusing on opportunities during retirement of interest using the skills I love using while shedding the skills and tasks I don’t. I was in early retirement number two for several months when the client mega-corp of my encore career specifically recruited me for a sweet 2 month project. It was the best working experience of my life. As my project was ending at the end of the year the manager asked that I delay returning to retirement. I was asked if I would accept a contract extension for some more project work. 

I was ready to return to retirement life. 

It was a great experience and I had a great time. The bonus was banking some good money to go towards other early retirement interests. The two months flew by painlessly and I had some things I was looking forward to doing in retirement freedom-mode again. But I enjoyed the short gig so much and I was treated well so I decided to accept a contract extension with conditions. I would stay for only a few months, only technical project work with a deliverable aligned with my departure date, no operational babysitting, and absolutely no project management responsibilities herding their cats. The deal was made for 4.5 months. I was happy to live with delaying my return to retirement under the negotiated terms and conditions until spring time.

Then it all went to hell with shifts in corporate management and funding. 

I returned to my desk January 2 to find all management in meetings and no project assignment. After a week of busywork I was notified that the manager I signed with was no longer calling the shots. The new manager called a staff meeting and spelled out her expectations, of which some critically crossed my set boundaries. I met with her and explained the agreement to my accepting the contract extension. She didn’t like it so I agreed to terminate immediately and return to retirement. She then said sit tight for a couple of days. Lets just say my conditions held but it was a hostile working relationship and an unpleasant working experience. I finished my project early and was happily back in retirement four months later, two weeks before the planned contract end. 

Things To Consider When The Boss Asks That You Delay Retirement And Stick Around 

Think hard and honestly about what percent of a decision to stay is about the money.

If the biggest reason to stay is money, then maybe you aren’t really ready to retire. Retirement means leaving paychecks behind. We should have figured out how we are going to pay for our retirement lifestyle before we retire. Extra money to spice up a retirement goal is one thing, but needing it to meet retirement financial needs is another. If that’s the case then there really isn’t a choice but to accept the offer to stay until financial confidence is reached, both literally and mentally. Otherwise, turning down the offer and leaving money on the table could result in retirement regret during times of financial worry. But you should still weigh in on the terms, even though you’re probably going to be more agreeable under this condition of financial need.

Delaying not only retirement but also delaying the ability to pursue passions and interests.

We set goals for our retirement. Is accepting an offer to stay worth trading your time for money when your heart is set on doing other things? Retirement is a major life milestone. Putting it off to stay in the grind needs careful thought. Leverage your freedom to your benefit. While some offers to stay can be mutually beneficial to both business and employee, always consider that the terms they are offering are more to their benefit than yours. Your retirement time has great value.

Determine what it would take to make the experience better than just the same job you are retiring from. If you really loved it so much you probably wouldn’t be retiring in the first place. Set work requirement boundaries. Would flexibility in schedule, required tasks, or number of hours worked make it mutually rewarding? If so, then negotiate for it. Then set the length of time you are agreeing to stay. If things work really well then extending longer can possibly be renegotiated. This way you can easily calm any retirement voice in your head that may come by knowing your exit date.

Know your place, you are not in the same position or the superhero you were.

Think of yourself as a consultant to help the staff going forward with a possible exit at any time. In most cases we delay retirement only temporarily. The cat is out of the bag and any decent management team is working to sidestep our sticking around because we are a known flight risk. Don’t start to believe this is more than what it is. Check your ego and keep your eye on the prize of your delayed hard earned retirement. 

You should have a say about the working terms.

Consider that retirement delay is worth more than your standard salary and negotiate with that mindset. Just because money isn’t the primary motivation to delay retirement doesn’t mean we have to be a sucker. If money is non-negotiable then use that as a bargaining chip to get better working terms to make a deal you really want to make.  

Be mentally prepared for workplace blowback.

I know very well how this works. When it’s obvious you received premium working conditions and/or more salary to delay retirement, then others will have certain feelings about it. There can be issues that need worked through. Just be honest. You’re delaying your retirement to help out with XYZ and will eventually leave. I found being honest about why I had what I had, my negotiated exit date, and being the most pleasant person in the office to work with softened resistance. Why wouldn’t we be the happiest person in the office? We set the perfect work conditions to stay. 

Be prepared to end the arrangement at any time.

You have to be ready to accept that things won’t work out. You may find yourself leaving sooner than expected for any reason within and beyond your control. That is unless there are specific contractual issues about ending the working arrangement early. Normally as a delayed retiree, cutting the arrangement short shouldn’t be an issue. After all, if you’re retirement ready, money isn’t the primary reason for sticking it out longer. 

In my delayed retirement experience, my saying “since the terms of my extension are no longer acceptable to management, I will be happy to end our arrangement right now” was met with disbelief. The manager was dumbfounded that I would walk away from a high paying gig like that over their insistence that I herd cats. In hindsight, I should have just left because they’re having to keep that contract extension condition was obviously a sore spot with the new management. It heavily tarnished what was a great working experience to that point for both of us. 

Turning down an offer to stay.

It’s best not to burn any bridges. You never know what will happen in the future where paths will cross. There’s always a possibility for new opportunities that align with your interests and passions coming your way. Whether your initial reaction to an offer to stay is to immediately say no thanks or you come to that decision after negotiations, be gracious when you decline an offer to stay. 

“I appreciate the offer, however at this time, I have made the decision to retire as initially planned. While I’ve enjoyed my career, the role I’ve played in the many accomplishments, and the opportunities that working here provided, I have already set my focus on the next chapter of my life. Thank you for the proposed offer.”

 

A decision to delay retirement and accept an offer to stay on the job can either be an easy NO or something requiring careful consideration. The thing to remember is that once you’ve properly announced your retirement intentions to your manager, you’re now in the driver’s seat. Where all lanes point to a life on your terms.

Binary Early Retirement Is Nonsense

Financial Independence, Financially Free, Retire Early, Retire Often,

What seems to be an issue with some folks when it comes to financial freedom and early retirement is it’s either this or that. You’re either financially free and retired or not. Basically, If you choose to do any kind of paid work or activity then you are no longer retired or financially free. Give me a break, what a crock! Binary early retirement is nonsense. Having financial freedom means having choices without financial worry when using our common sense. Yet people just can’t shed outdated notions about early retirement and the financial freedom that allows for it. Especially those binary early retirement loving critics who haven’t experienced it for themselves. That said, let me say I do see why they think what they think and I hear their criticism. Simply, there are long entrenched traditions regarding retirement. However, let me explain where I am coming from. 


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Why Binary Early Retirement Is Nonsense

After nearly 10 years of early retirement through financial freedom that has included a stepped down position, a highly paid encore career, a lucrative retirement side hustle, a fun little short-term retirement gig, and this early retirement focused website, I speak from REAL experience. I claim and truly believe I’ve been retired and financially free through it all. All the way back to day one in 2009 when I ditched my long career. I live it and I have enjoyed the hell out of it. I’ve even increased my wealth at my pleasure, on my terms, and at our corporate world’s expense (yes, I have a particular attitude toward the corporate world). A total win-win!

 

I use the terms “highly paid, lucrative, and increased wealth” above to get the attention of any financially focused binary early retirement believers. 

But the reason I can honestly say that I was still retired and financially free the entire time I was getting paid working is I had the financial freedom to accept worthy opportunities I was interested in doing without regard to pay. I also had the financial freedom to quit doing them as soon as my interest ended, regardless of what they paid, and I certainly did. 

 

Financially free early retirees still have all the energy and drive that got them there. If they choose to work pursuing their interests and passions they can still consider themselves retired and financially free. 

They can then add any earned income to their portfolio, donate it to charity, or use it to help support a cause or hobby they want to continue pursuing. That’s the freedom lifestyle earned through executing a successful spending, debt elimination, and investment strategy.

 

It’s the absence of NEEDING to work that defines retirement, not the absence of working 

 

That’s not just some catchy concept, it defines retirement perfectly. Reject the outdated and rigid notion that we work until we can afford to retire and then never work for pay again. Why be financially free and then put limits on our freedom? 


Everyone’s vision of financial freedom and early retirement is different 

What’s common among them is that they have enough of a portfolio and/or passive income to be able to pull off their desired version of FIRE. A version which may or may not include any paid work. 

 

If doing any paid work in early retirement turns you off then don’t do it. I’ve freely chosen not to be in the paid work game since the summer of 2016. But, if the right opportunity presents itself I wouldn’t binary label myself retired and not pursue it. That’s the beauty of financial freedom.

 

There’s no call for trolling or shaming anyone who engages in a paid activity in their early retirement. Nor any other dictates of binary early retirement where it’s this way to be considered early retired or you’re not. Don’t let others negative opinions who unproductively criticize dissuade you from your own early retirement vision. Take away ideas from financially free early retirement stories and live your own vision. 

 

OK, I feel better now.

 

There Are Many Flavors Of Early Retirement: Why Mine Isn’t For You

Retire Early, Retire Often, Retirement Plan

There are many flavors of early retirement that people have found success with. The recipe usually starts with the same base ingredients. It begins with envisioning what our ideal retirement lifestyle would look like. Then it’s all about what it will cost, how much we need to save to pay for it, and what could actually be done to pull it off. But different people will add different favoring to the recipe. What works for them may not be appetizing to others. Based on what people believe about early retirement and the negative feedback that they enjoy sharing, I know that some of the flavors of early retirement that I found success with isn’t for everyone.

There Are Many Flavors Of Early Retirement: Why Mine Isn't For You

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The Flavors Of Early Retirement I Chose That Might Not Work For You

When I left the grind I didn’t really know anything about financial independence retire early (FIRE). I simply wanted to retire as young as I could and had to figure out what would work for me. I met with a financial planner, I would read books, and I researched the few online resources at that time to get real life early retirement success stories. All of this provided some great ideas and for various reasons there were many things that just wouldn’t realistically work for me. It’s the things that could work for me that mattered. That’s what I used to personalize my early retirement success strategy.

If you are on your early retirement journey then you are most likely doing the same kind of research and know exactly what I am talking about. Although there are many flavors used in my early retirement that are useful to a variety of people, here are a few that you may or may not like –

Early Retirement Allows For Paid Work

This is a flavor where a little goes a long way when added correctly. Even though “Retire Early and Often” is my tag line, my having worked some retirement gigs and a short encore career is the thing that I catch the most grief about from people who love to let me know the rules of retirement. I get it, traditional definitions of retirement means being done with working. It seems to be very hard for some people to let go of. This flavor of early retirement that I chose and live by spells it out this way: Retirement is the absence of NEEDING to work, not the absence of working.

I don’t need to work to live the lifestyle I want to live. But I certainly stay open to opportunities that I would be interested and passionate about doing. Months and years will and have separated my adventures in paid retirement gigs.

Many early retirees will engage in any number of paid endeavors both big and small.

This chosen flavor of early retirement is one where I live off of my portfolio and strategically add any salary I may earn back into my net worth. I’ve shared my experiences and how much it has benefited me. It isn’t a flavor for anyone who can’t shake loose of outdated retirement rules and accept that they just might one day WANT to re-enter some form of paid work as part of their retirement. After spending decades in the rat race, I’ve found it both exciting, enjoyable, and even somewhat liberating to take on an opportunity for just as long as it meets my interests, passions, and needs.

An Early Retirement Where The 4% Withdrawal Rate isn’t Gospel

I chose instead to flavor to taste. No matter what percent is used or believed as a safe withdrawal rate, my flavor of early retirement doesn’t believe in a static withdrawal rate that’s set at our retirement date. I see it as guidance, not gospel. Why? Because life will happen. Things will change as we age and through time in our retirement. There will be things we can and can’t possibly plan for or control, both good and bad. I believe in having a dynamic withdrawal rate with a heavy dash of lifestyle inflation control. A 4% withdrawal rate on the common early retirement benchmark of $1M sets it at $40K a year. That’s great if you can earn enough to save $1M or more. But for me and most people I know, accumulating a portfolio of that size would mean delaying retirement to old age, if ever.

I started with a withdrawal rate closer to 5.5%. But I also calculated in my expected Social Security income to start about 16 years later. My Social Security, even if reduced because of government inaction to shore it up, should lower my portfolio reliance by at least 50%. That’s one major reason my starting withdrawal rate wasn’t planned as static over my retirement. Therefore I chose to retire early with less than a million dollars and began the early retirement lifestyle I planned for.

My flavor or early retirement has a withdrawal rate based on retirement calculator results.

I didn’t start retirement funding with a percentage of my portfolio, I started with an amount I needed. I simply ran the needed funding numbers against my portfolio amount and plugged in my future Social Security. Now nine plus years into early retirement my withdrawal rate is 3.7%. That’s even with today’s higher than planned health insurance cost. I expect my withdrawal rate to significantly drop even more once my Social Security begins. Medicare is even closer for me to start. It will most likely further reduce my withdrawal amount because our health insurance represents a third of my current budget.

The way I retired early probably won’t work for those who only believe in a gospel of a static withdrawal rate plus inflation. My early retirement flavor is to have a flexible, dynamic, and realistic withdrawal rate. One backed up by Monte Carlo retirement calculation results.

Funding Early Retirement With Tax Deferred IRA & 401K First

Flavor sequence matters. The traditional way to sequence our retirement withdrawal sources was to use non-retirement assets first. Then look to tap into our tax deferred IRA and 401K. Any Roth accounts are then tapped last. The thought is it’s best to spend down non retirement accounts first. Reasoning it’s better to allow our tax deferred retirement assets to continue growing tax deferred. Our Roth IRA funds would then be left for late life tax-free withdrawals. It seems like sound advice and for many this is the default path of retirement funding sequence. But that didn’t taste right to me because it doesn’t fully consider the impact of taxes.

My funding sequence uses a different retirement withdrawal strategy that considers tax efficiency.

The strategy I use starts retirement funding by first withdrawing from my tax-deferred (401K/IRA) retirement accounts. Withdrawals were limited to stay below the upper threshold of the 15% tax bracket. Today with the new tax law the goal is now to always stay within the 12% bracket. I was in a higher tax bracket than that during my saving years in the trenches. Getting the higher tax benefit savings then and paying less taxes now on tax deferred savings is a welcome gain.

Before I reached the age of 59 ½ I used SEPP 72t to avoid the early withdrawal penalty to fund my early retirement from my IRA. With that now ended I still use my IRA first. My withdrawal strategy will only withdraw from my non-retirement account savings/investments if I ever need more than what the 12% tax bracket allows. Roth accounts are still sequenced to be used last, only after my other non-retirement account savings/investments are depleted. My Roth is not being held until my IRAs are dry. They will also be used when needed for tax rate management. This withdrawal strategy was found to add to portfolio longevity. I also believe in using this strategy to assist with managing Social Security’s taxability when I eventually begin it.

Anyone who believes in and prefers the more simplistic and commonly touted portfolio fund withdrawal strategy will not favor this flavor that I use.

Flavor Your Early Retirement To Your Taste

The above flavors I shared are just a few that I’ve used for my early retirement. There are all kinds of early retirement success stories to be inspired by. They range from extreme frugality to mega portfolio accumulation. They come from people who are Social Security believers to those who have given up on it and would never consider counting on it. We will always come across some of the touted early retirement flavors that won’t work for the unique blend we prefer, we can realistically reach, or that we can tolerate.

During my pre early retirement research I did run into ideas that I took in as workable. But there were others I just moved on from as not being for me. I understand why some of the ways I put together my success recipe for early retirement won’t be for everyone. Hopefully what I share about my early retirement experience provides some new ideas that can be turned into your own unique solutions. Wherever your early retirement research takes you, look for ideas that appeal to you, verify through calculation, and craft your own winning combination of early retirement flavors to use for your success plan.

The Retirement Crisis I’m Not Worrying About

Retire Early, Retire Often, Retirement Business, Working In Retirement,

It’s a wonderful time for early retirees like myself. Those of us who believe that retirement isn’t the absence of working but the absence of needing to work should see even more attractive opportunities. Even though there is plenty of talk about a retirement crisis of financially unprepared retirees, the boomers are still retiring at a pace of 10,000 a day. That’s 10,000 every day! On top of that, the latest national unemployment rate just came in at 3.9% and there is a growing business gripe that they are having trouble finding qualified employees.

With the high number of boomer retirements, one can only logically see a different retirement crisis brewing. One where boomer retirements is going to be an increasing negative impact on employment numbers. That is certainly one retirement crisis I’m not worrying too much about. In fact, it may eventually make it even easier for people who are prepared financially to retire early and often.

 

The Retirement Crisis I'm Not Worrying About

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Seeing This Employment Retirement Crisis As An Advantage

I’ve had some great retirement gigs and even a sweet encore career. I took things as far as I wanted and then retired again. I haven’t been tempted to accept another opportunity for the simple reason that I now value time more than money. Most opportunities like I would be attracted to still insists on cheeks-in-seats 40 hours a week. But things will have to change to meet the hiring demands of business. Here’s what I think may be coming –

More Flexibility –

Some companies are already offering remote-report opportunities. But I think this will expand. Right now everything I have seen or been approached with still want a full-time commitment. That just isn’t aligned with what I value now. What would really draw me back is part-time or flex-time opportunities.

Consulting Expansion –

My encore career was working through a consulting company. I’m looking forward to seeing more short-term opportunities. Single project types where even though it requires 40 hours a week it would only be for a short period of time. Even part-time consulting opportunities may become more common.

Entrepreneurial Opportunities –

Starting my own specialized business to fill other companies needs may be easier to land steady client work. This is something I would be attracted to since I could better define my work offering.

Downsized Opportunities –

As others get promoted to fill more senior level positions because of retirements, there may be many lower level openings perfect for early retirees. Especially if offered with flexibility, open to consultants, or to entrepreneurs.

 

At some point business will realize that offering slight salary increases and tossing some benefits here and there won’t be enough to meet their needs. Although I haven’t personally seen evidence that business is ready to open up their employment alternatives to be more friendly to picky early retired folks like me, I believe it’s only a matter of time. The old employment model of their way or the highway isn’t going to fill job openings in the near future with ever dwindling available workers. And if my logical assumptions of transformed work opportunities never comes to pass, then great. I will happily stay retired and smirk when I hear or read about business complaints of not being able to find qualified employees.

Early Retirement Is More About Pursuing Dreams Than Retirement

Early Retirement Lifestyle, Retire Early, Retire Often,

Yes, I’m an early retiree. But I hardly ever say or think that I am retired. Maybe it’s because of some physiological retirement hangup due to my age. But it’s more likely because I believe early retirement is more about pursuing dreams than retirement. That has certainly been my experience. As I have celebrated yet another birthday, having just returned from one of many planned vacations this year, and look back at my 9.5 years of early retirement, I can’t help myself but reflect on what early retirement has been for me and how I try to explain it.

Early Retirement Is More About Pursuing Dreams Than Retirement

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I’ve Found Early Retirement Is More About Pursuing Dreams

Mention of the word “retirement” within any context and it evokes different visions for different people. Usually it’s the traditional images of retirement that enters one’s mind. I believe associating that narrow traditional image with early retirement is a barrier. One that keeps many people from taking the necessary steps to successfully retire early. It certainly takes a substantial portfolio to support that image of early retirement. If my younger self knew then what I know now, I certainly would have been even more motivated to retire early. Once you ditch the word “retirement” and all of its traditional imagery, then replace it with having the freedom to pursue dreams, I think early retirement becomes much more attractive. Depending on your dreams it becomes much more attainable too.  

 

Dreams are meant to be big but also realistic

You have to be a dreamer to walk away from a successful career. The trick is understanding that if you really want it, you need to figure out ways to make it happen. The thing we have going for us with early retirement is youth and energy. That means we are willing and able to pursue dreams and many times some of our dreams will also provide income beyond our portfolio.

My early retirement dream didn’t require me to save a million or more dollars, or even have my mortgage paid off. I didn’t make a huge salary. Trying to first reach that high level of financial accomplishment would have delayed my retirement into old age. My dreams were centered around my family, community, friends, and travel. It was also focused on things I wanted to learn and do. I planned right from the start that I wanted to retire early and often. People I worked with thought I was nuts, but all of this is exactly what my early retirement has been.

Some of my pursued dreams failed and others surprised me when they didn’t turn out to be as attractive as I thought they would. As some dreams were lived, others lost appeal and new ones were born. Early retirement is an amazing adventure.

 

I saved just enough to allow myself to do it

Paying off my mortgage and increasing my net worth beyond having just enough all came after my first early retirement. I had some awesome retirement jobs and a successful encore career. I have taken criticism with claims that all I did was a late life career change, but I disagree. My early retirement dream is based on this simple definition: Retirement is the absence of needing to work, not the absence of working. I cut my lifestyle cost using smart frugal living and saved just enough to fund that lifestyle.

I walked away from forced obligation to being free to go after anything I wanted to. There were opportunities I really wanted to explore and experience. There’s so much I want to learn more about. I knew that retiring early meant still having the energy and drive to accomplish whatever I wanted to pursue. Once I felt I got all that I wanted from the experience and was ready to move on, I would just retire again. I feel I dreamed big but also realistically. It all started with knowing I had just enough to give me the courage to do what I had long-planned to do.

 

Early Retirement Pursuing Dreams

Whatever one’s early retirement dreams are, from being a world travel photographer, an artist, starting an encore career of passion and interest, or beginning a business, to living something closer to a traditional retirement lifestyle, either here or abroad, early retirement is more about pursuing YOUR dreams. Figure out what your dreams are, then do what you can to make it happen. I can personally say that it is totally worth the effort.

Pension Eligible And Still Working? Maybe You Shouldn’t

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If you’re fortunate enough to be working somewhere that offers or offered pension benefits then congratulations are in order. Very few in today’s world have that level of retirement benefit anymore. But once you are pension eligible, is staying on the job to work longer instead of retiring the best way to go? Many times the answer is NO.

Pension Eligible And Still Working? Maybe You Shouldn’t

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Things To Consider Once Becoming Pension Eligible

Whether you have a defined contribution plan or a defined benefit plan, it will represent a big part of your retirement funding. Those who have enough in pension and retirement savings to retire usually do retire. But if you don’t and have decided to stay working, wouldn’t you want to maximize your pension benefit and future retirement funding?

Post Pension Eligibility Growth

You may be surprised at how little your pension benefit grows going forward. Once you’ve reached your pension eligibility milestone and get the big bounce, the additional years of service may offer very little if any growth. The first step is checking with your company’s pension administrator or HR benefits representative to find out what your pension estimate is. Then find out how much it increases if you stay on the job.

For instance, where I worked, you were fully pension eligible with 30 years of service regardless of your age. If that happened before reaching age 55, then your pension would grow 3% a year until age 55. But after that it was based only on salary increases and your highest consecutive 5 year salary averages. It took big raises to move that needle.

Frozen And Going Nowhere Fast

For many, this little retirement benefit investigation starts right away with bad news. You’re reminded that your pension was frozen by your employer. Meaning that it won’t grow at all or may grow far-far less than their pre-freeze pension rules over the time we stay. That pension benefit then becomes negatively affected by inflation before we even collect a single penny.

 

Got Retirement Benefits? Don’t let them sit, let them rip!

Once we reach pension eligibility, whether it is frozen or not, decide if the rate of growth is too little to make it worth staying. The pension benefit growth rate is nothing we have control over. Why not pull it out and put our retirement benefit to work for us? Maybe pulling your cookies out of their cookie jar and rolling them into your own IRA cookie jar to control investment direction or beginning your pension annuity payment now is the better retirement strategy. Don’t underestimate the power of working and collecting a pension check to invest or a lump sum to rollover to supercharge your retirement savings. If you are going to work anyway, this strategy of changing the scenery is all about giving yourself the chance to grow your retirement portfolio.

 

Why Are You Still Working There Instead Of Taking Your Pension And Running?

Need To Work Longer

There are many reasons why someone who has a pension benefit needs to work longer. From simply wanting to still work to needing more time to meet retirement financial targets. But nothing says you have to stay at your same job and company to meet your goals. This is a great time to pursue opportunities in the same industry with a different company or go in a new direction and do something completely different. The best time to find a great job is when you have one. Consider looking and applying for outside opportunities while on your job. See what’s available, choose the perfect position, and understand your options. Then once hired, announce your retirement and apply for your pension and other retirement benefits.

Love What You Do

Perhaps you stay because you love what you are doing. Do you think that you would love doing it just as much somewhere else? Especially when knowing that you have taken control of your locked up pension and have the chance to better grow your retirement portfolio?

Coworker Friends

Is a big reason you are there due to friends you have on the job? Nothing says you can’t stay in contact. In fact, your being at a different company will add a whole new dimension to your conversations. Taking your pension and running will also allow you to easily expand your social circle and professional network.

Comfortable

It can be very comfortable working a job you know from end to end. But be honest with yourself. Do you sometimes feel like you are stagnate? Starting a new job will be exciting and carry a bunch of optimism about your future. True, it will also bring some discomfort from temporary stress until you learn the ropes. The key word here is temporary. A little stress early on and before you know it your comfort will return. Start thinking about the possibility of personal growth through a new job.

Lucky Are The Few With Retirement Health Insurance Benefits

If you have retirement health benefits, you are open to look for a lot more opportunities since health care won’t be a target factor. If the position offers employee health insurance benefits, you can explain that you have coverage. Then try to negotiate your salary up because you won’t need theirs. Being able to accept any position whether they have health insurance benefits or not is a huge advantage. Obviously if you don’t have retirement health benefits, limit your opportunity search to companies that offer employee health coverage. If starting your own business, expanding an existing side hustle, or choosing an opportunity without benefits, check for all available health insurance options. Consider the cost of health care in your decision.

Pension Eligible – Should you stay or should you go?

There’s nothing wrong with being pension eligible and still working for your same company. But maybe you should really consider taking your retirement strategy to the next level by retiring and moving on. This strategy isn’t theory. I was in a pension plan that kept changing the rules, converted many employees from a defined benefit to a defined contribution plan, denied others completely, and then finally froze it. I retired a young 51 and have enjoyed and benefited from my retirement gigs and a short but sweet encore career. While I was doing that, I used what pension cookies were left to me to grow in my cookie jar and executed a strategy to increase my net worth.

If you are pension eligible where you work, take a step back from the same-old same-old and see if you could be doing something better for your eventual retirement. Then do some research and check available opportunities. If you need it, even if for nothing more than a confidence boost, consult with a CFP for some financial advice. Even if you decide to stay after doing all of that, then you will at least have the knowledge about your pension going forward. That way you can proactively close any discovered pension growth deficiency by setting aside additional savings on your end.