Should you retire early or keep working if you love your job?

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Early retirement has become more popular over the years as people save and invest toward a coveted reality: enough financial freedom to live a comfortable life and never go back to work.

Entering retirement is not always as easy as we think it will be. We often don’t think about how emotional the transition can be; After decades of having a savings mindset, you now need to start spending the money you’ve accumulated, and that can be a source of anxiety for many future retirees. But in addition to this dilemma, those who are nearing retirement (close enough but could still work a few more years) sometimes face another dilemma: Do I keep working because I love my job, or should I quit and start my retirement?

Select asked Joe Duran, head of personal financial management at Goldman Sachs, for his thoughts, and according to him, the answer to his situation might lie in striking a balance between the two.

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The benefits of working longer

Retirement and our perception of it have really changed in the last few generations and now it could include part-time work or even going back to school,” says Duran. “People are reimagining retirement every day and having a good financial plan can give you a lot more confidence and reduce the anxiety that is often associated with retirement.

There are, of course, some advantages to staying in the workforce as long as possible. For one thing, the longer you delay the distribution of your Social Security benefits, the more you’ll receive each month when you decide to claim your benefits. If you have limited sources of retirement income, this may encourage you to continue working until you reach age 67, the age at which you can receive 100% of your monthly benefit. Plus, you can get an 8% increase in your benefit for each year you delay receiving Social Security, up to age 70.

And, of course, the longer you work, the more money you can save for retirement, especially if you hadn’t been saving for retirement when you were in your 20s or 30s. Retirement accounts generally have annual contribution limits: For a Roth IRA, for example, you can only contribute $6,000 a year ($7,000 if you’re over 50). These contribution limits are used or lost, which means that if you only contribute $5,000 this year, you can’t contribute an additional $1,000 next year.

Over time, the missed opportunity to maximize your contributions can add up and, depending on when you started saving for retirement, could even play a big role in the lifestyle you can afford.

So if you haven’t been contributing to a Roth IRA yet, it might be time to open an account and start saving your money in one. Wealthfront and Betterment make the process as simple as possible, as they are robotic advisors that can actually make investment suggestions based on factors like your risk tolerance, goals, and retirement time horizon. Because of this, they also take a lot of the stress out of money management, which can be an advantage for many people, since there is already so much to do in everyday life. Or, if you want to go the more traditional route, you can open a Roth IRA through a brokerage firm like Fidelity or Schwab.


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Even if you already have a workplace 401(k), it’s still a good idea to contribute to a retirement account that isn’t linked to your employer and that allows you to contribute after-tax income in advance for tax-free withdrawals in the future. This is yet another factor that can play a role in how much financial flexibility you have in retirement, and it can be just as important as how long you stay in the workforce.

“Continuing to work for as long as possible will definitely give you more options and financial freedom in retirement,” explains Duran. “Working for a longer period of time not only gives you more savings and builds your safety net, it also provides health benefits that you don’t have to pay for yourself.”

It is important to strike a balance

However, Duran also suggests that you need to consider balance in other areas of your life when considering whether or not you should stay in the workforce. According to him, even if you love to work, you can never recover the time you have lost. It’s important to figure out what actions would give you the right balance between financial flexibility and how you’d like to spend the rest of your life.

“It’s also important to remember that the people in your personal life need to be included in how you prepare and think about what retirement might look like,” says Duran.

Many people choose to use their retirement to spend more time with their adult children and grandchildren. They may find that being able to pick up their grandchildren from school, join their families for spring or summer break, and volunteer at their grandchildren’s school events are meaningful ways to spend their retirement, especially if they would not have been able to participate in these activities during a normal working day.

But those who don’t yet feel fully prepared to say goodbye to the workplace can think of ways to make adjustments that still allow them to work and adjust to non-work activities that bring them joy.

“Many people today think of adjusting their work life by reducing the number of days they can work or taking consulting jobs as an alternative to still enjoying work but also increasing the amount of personal freedom they’ve earned,” Duran suggests. . “This is not just a financial decision, it’s also a psychological one and the loss of your work identity can be quite difficult to adjust to, which is especially true if you have anxiety about your financial situation.”

Bottom line

Editorial note: Any opinions, analyses, reviews, or recommendations expressed in this article are solely those of Select’s editorial staff and have not been reviewed, approved, or otherwise endorsed by any third party.

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