Thursday, 5 February 2015

Working During Retirement

Originally posted on Michael Greer:

Planning on working during retirement? If so, you’re not alone. An increasing number of employees nearing retirement plan to work at least some period of time during their retirement years.

Why work during retirement?

Obviously, if you work during retirement, you’ll be earning money and relying less on your retirement savings–leaving more to potentially grow for the future and making your savings last longer, as shown in the example below:


  • Retirement savings $1,000,000

  • Earnings rate 6%

  • Preretirement income $150,000

  • Social Security $2,000/month

  • Desired income replacement 80% ($120,000/year,


Without working, you’ll need to use $8,000 ($10,000 desired income minus $2,000 Social Security) of retirement savings per month, and your savings will last 16 years.
But if you earn this amount monthly:for 3 years, your savings will last:for 5 years, your savings will last:for 10 years, your savings, will last
$1,00017 years18 years19 years

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