When I write about retirement planning or saving for retirement in general, one reply I often hear is, “But I don’t want to retire! I enjoy my work.” That’s a sentiment I can relate to personally. I enjoy my work a great deal, and I hope to continue doing it for as long as I can.
So, for those of you in a similar situation, what should you be doing differently from other investors?
Should You Save for Retirement Anyway?
You may enjoy your work now, but will you still feel that way when you actually reach the age where most people retire? Betting your future livelihood on the assumption that you won’t change your mind is a risk that doesn’t seem wise to me.
Naturally, the level of this risk is affected by your current age. If you’re 62 and have no desire to retire, that’s one thing. Being 32 and having no desire to retire is another. The likelihood of changing your mind at some point in the next three decades is much greater than the likelihood of changing your mind in the next three years.
In fact, if you’re in your twenties or thirties, I’d suggest saving as if you planned to retire at a typical age, regardless of whether you currently intend to do so.
Once you begin to close in on 65 or so, if you still feel no desire to retire, then at that point, it likely makes sense to start scaling back your annual retirement savings. (Or, depending on how much you’ve accumulated by that point, it could make sense to stop saving completely.)
How Long Will You Be Able to Work?
Even if you never end up wanting to retire, it’s important to recognize that you might not get a say in the matter. Layoffs occur, even to valuable employees. And in an era where age discrimination is an (unfortunate) reality, finding another job isn’t a sure bet.
Alternatively, even if your employment prospects never pose a problem, your health might. Depending on the work you do, there’s a good chance that at some point your body simply won’t allow you to continue the same level of productive output.
To neglect saving because you assume you’ll be able to work as long as you want puts you at risk of a meaningful decline in living standard later in life.
Roth IRA or Traditional IRA?
As we’ve discussed before, the question of whether to contribute to a Roth or traditional IRA is primarily a function of how you expect your tax bracket during the withdrawal stage to compare to your current tax bracket. (If you expect it to be higher later, go with a Roth. If you expect it to be lower, go with a traditional IRA.)
Naturally, if you expect to continue earning income well into what many would consider their retirement years, your late-in-life tax bracket is likely to be higher than that of many other investors. As such, a Roth IRA becomes relatively more attractive.
Don’t Forget About Insurance.
Lastly, if you work well into your 70s, you’re going to have different insurance needs than investors who retire at age 60 or 65. If you’re planning to continue working (and you expect to be reliant on that income), you’ll probably want to keep a disability insurance policy active. And, if anybody other than you will be relying on your extended-career income, you may also need life insurance longer than most other investors.
Hi. I'm Mike Piper, the author of this blog. I'm 
I like this article… it just lacks the cold hard numbers that would nail the point. How many people find themselves forced into retirement and at what ages? How many people actually work until age 70 that wanted to?
From what I’ve seen, people should plan on retirement at age 55 since a significant number of workers are forced into that situation. Layoff or medical condition arrives at that age and, even if they manage to return to the workforce, they cannot attain their former salary, so something in their life has to give way.
Hi George.
I agree, it would have been great to have some statistical figures to include. I tried to do exactly that, but found that it’s a surprisingly tricky issue to measure, so there doesn’t appear to be much solid data. (To use your example, you can look up many people are still in the workforce by age 70, but there doesn’t appear to be much out there on what % of those workers are working because they want to–as opposed to have to.)
The best thing I could find was the data linked to above about how many age-discrimination suits are filed per year. But even that has problems, because there’s no way to know what percentage of those are without merit.
Edited to add: That’s not to say that there’s no such data out there. I just couldn’t find it. If any other readers happen to have any relevant resources, please share. 🙂
“To neglect saving because you assume you’ll be able to work as long as you want puts you at risk of a meaningful decline in living standard later in life.”
I think that was the “money sentence” in your very good post.
We’d all like to assume we will be healthy, energetic, involved, motivated forever. While I would encourage everyone to work at what they find meaningful for as long as they are able, I suggest you plan as if you will be out at 63. You will appreciate the option later, even if you do not now!
Dropping in at http://en.wikipedia.org/wiki/Retirement and checking the references led me to http://eh.net/encyclopedia/article/short.retirement.history.us which has a few interesting tidbits. Doesn’t really answer the “did they have to retire” question, but at least there are some numbers as to how many people are working at what age.
Oooo… another good link for the “Health and Retirement Study”, 2007: http://www.nia.nih.gov/ResearchInformation/ExtramuralPrograms/BehavioralAndSocialResearch/HRS.htm
Nope, doesn’t answer that specific question. But it sure is an interesting article, regardless. Lots of interesting tidbits indeed.
Thanks for sharing it. 🙂
Although the “concept” of saving for retirement is sound, the reality is a bit more complex. Having a substantial net worth gives you one less BIG thing to worry about in life …. running out of money. It also offers choices, control, and flexibility.
If you own your own company, do ever really consider not working anymore, retiring. Your still getting financially compensated. Though your not there, money is still being made. For someone in this position its the best of both worlds.
My friend owns a insurance business which is run by 3 employees. They do all the work. My friend takes a lot of vacations. Its like being retired, yet not.
He has retirement enough to close up. But doesn’t have to. Can I have this deal?
You have to be a genius to save for retirement especially with the economy sinking everyday-One day you have a networth of $500000 two days later your house is worth half its value and your stocks sunk again.