Personal Finance FAQ

“Working Retirement:” A Formula for Unhappiness?

unhappy allergen
A wet cat is an unhappy cat.

“Retirement can be a great joy if you can figure out how to spend time without spending money.”

“The harder you work, the harder it is to surrender.”
–Vince Lombardi

When I make the networking rounds in Fort Worth, one of the questions I always try to ask people is “what do you want to be when you grow up?”

It’s my playful way of asking them what they’re planning on doing when they’re done doing what they’re doing now. In other words, what do they want to do when they retire?

Once they get beyond the hemming and hawing or the “if I had money, I’d hire a financial planner” responses, I find a lot of them haven’t actually thought much about it. Inertia has taken over their lives, and they don’t really consider what life beyond the horizon will look like.

After a few seconds of contemplation, many of them answer with something similar to this:

I don’t know. I’ll probably keep a part-time job just to stay busy.

They have half of the equation right, but the part that they have wrong will make them a lot less happy than they could be.

Does a Part Time Job in Retirement Mean Full Time Misery?

There are two primary reasons why people would continue to work in retirement (though, arguably, if you’re working, you’re not actually retired):

  1. They need the money, or
  2. They want to keep mentally sharp.

Both of those reasons have sound logical underpinnings for the decision to pursue part-time employment in later years.

Both of them lead people to the wrong conclusions.

Let’s look at the logic behind each of these reasons.

I need the money, so I’ll work some in retirement.

For the people who come to this decision in their lives, they are facing one of several possible scenarios that causes them to think they should work more, and, in some cases, they’re correct.

  • They don’t have enough money accumulated to have a safe withdrawal rate. If they can’t make ends meet without significant risk of depleting all of their assets, then they probably need more money, and work will a) delay drawing on those assets because it b) provides a current income.
  • They don’t want to decrease their standard of living. This is a choice people make, even though they likely overestimate the pain of dialing back the monetarily-linked lifestyle. They worked hard to attain a certain lifestyle, and they want to continue to maintain that lifestyle – a very reasonable desire.
  • They don’t account for spending changes as they age. They take their current spending, add a little inflation each year, and project ad infinitum. However, research shows (linked at the end of the article) that spending declines at about age 75, and for the properly insured, hits a plateau.

People in these situations could reasonably, but incorrectly, conclude that they should continue to work some in retirement.

I don’t want to sit on a couch and rot.

Rightly so, some people fear a lack of mental challenge and the incipient decline that it would portend. Therefore, they conclude, they should continue to do some work in order to keep their minds sharp. Mental stimulation and activity is one of the keys to maintaining vitality as we age. Lower activity leads to lower satisfaction in retirement. As Neil Young once sang, it’s better to burn out than to fade away.

Both causes of concern are legitimate for potential retirees.

But, the conclusion that part-time work in retirement will solve those issues is the wrong one.

Why part-time work in retirement means full-time misery

As we examined in “Make a Decision and Make Monkey Brain Stick to It,” we have a hard time with creating closure in our lives. If we don’t create closure over a decision, then we’re going to constantly reevaluate our decision and wonder whether or not we made the right decision.

Instead of gaining the benefits of retirement, we’ve merely slotted retirement into the back of our minds, initiating the Zeigarnik Effect, and making us unhappy.

We still have the stress of work and consider ourselves, for mental purposes, employed, without getting the benefits of full-time employment. Furthermore, instead of defining ourselves as who we are (a soccer fan, a traveler, a dog lover, etc.), which will cause us more inherent happiness, we continue to define ourselves as what we are (an HR professional, a doctor, a salesperson, Fort Worth financial planner, etc.).

The solution to this problem is quite simple.

Don’t work in retirement.

If you don’t have enough money to live off of your assets in retirement, then continue to work full-time until you do. Don’t know how much money you need to get to that point? Please fill in the contact form, and I will connect you with a financial planner.

Furthermore, by working in retirement for the money, you’re delaying your actual retirement by many more years. Let’s say that by working full-time, you could retire in another 5 years or by working part-time, you could truly retire in 10 years. In either case, mentally, you’ll be working at least five years, but if you continue to work part-time, you’re going to be mentally committed to your job for another ten years. You’ll be delaying your happiness by another five years.

If you do have enough money to live off of in retirement and want to keep your mind stimulated, then find hobbies that you enjoy and which provide some mental challenge, but not an extensive challenge. You’ll be happier with moderate mental stimulation than with overly onerous and taxing mental challenges.

If you want to read more about some of the studies on happiness in retirement and also about retirees’ spending habits, Professor Michael Finke of Texas Tech University has an excellent summary article here.

Were you planning on working some in retirement? Has this article changed your mind? Let’s talk about it in the comments below!


Jason Hull, CFP®, was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business.

You can read more about him in the About Page.

8 replies on ““Working Retirement:” A Formula for Unhappiness?”

Great post, Jason– I hope it helps people clarify their thinking… or at least start it.

If a career at work keeps us “mentally sharp” then I’d never retire and people would spend seven days a week in the office. My objections to employment have always been the commitment, the relatively rigid time constraints, the rush-hour commutes, the “office attire” uniform, the mandatory meetings… you get the point.

Volunteering, travel, and plain ol’ hobbies offer plenty of ways to stay mentally sharp!

Great point about the work + mental engagement –> “mentally sharp” syllogism. It seems to fall apart when we don’t work 365 days a year.

While the ideal goal for some people would be to have work that seems like a hobby, most people will never reach that state.

Very good article. I often think about this subject.

For me, if I’m able to keep working to 50 or further, it’s doubtful that I’ll need to go back to work for financial reasons. But when I do retire, it does seem like it would be anticlimactic. I define retirement by what it’s NOT more by what it is. (I don’t have to get up early, don’t have to go to work, don’t have to stress about money, etc., etc.). It just seems like a big void.

Many of us (including me), define ourselves by our jobs, simply because we need to survive the hard-scrabble society we live in. Unfortunately, it also means that, firstly, we not enjoy our working lives and, second, we’re left almost without direction when it comes to retirement. (That is, if we’re even blessed enough to HAVE a retirement) In a sense, we become institutionalized, much like long-term prisoners get, and cannot function in the outside world anymore.

There are “textbook” things that everyone likes to talk about doing (travel, spending time with your kids/grandkids, etc.), but they’re all short-term distractions.

I think the only solution is just to try to retire as early as possible while you still have some energy left and are not too set in your ways. Then you can rediscover who you once were.

For the people who don’t retire to something, then retirement is indeed anti-climatic or even boring. From everything that I’ve read and I’ve learned in talking to people who retire early (and this is corroborated in Tim Ferriss’s book The Four Hour Workweek and, by extension, in some of Adam Grant’s research), there are two main contributors to your happiness when you no longer work:

  1. Continuing to learn and keep challenging your mind
  2. Giving back somehow (usually through volunteering, but it doesn’t have to be defined that way)

You’ve pointed out the real crux of the situation that you and many others face when it comes to the perception that retirement will be one big void:

Many of us (including me), define ourselves by our jobs

Until you can change your framing of defining yourself from “I am a [FILL IN THE BLANK JOB]” to “I am a [FILL IN THE BLANK DESCRIPTION OF YOURSELF…e.g., dog lover, traveler, soccer fan, proud father, etc.] who works as a [FILL IN THE BLANK JOB],” you’ll continue to face that conundrum: I work and eventually get burned out to the point where I don’t want to/can’t do it anymore, but I don’t know who I am.

Therefore, while your approach is one way to get there, why wait until you retire to define who you are? Look at the world with a sense of wonder and amazement. Get rid of your preconceptions. Try to think like a child. Be curious. Don’t be afraid of what others think. Discover the who inside you working to get out. Then, you’ll have a reason to try to retire earlier, and you’ll enjoy life more along the way.

Thanks for the comment and for taking part in the discussion!

I don’t know if I totally agree with this, as there are some jobs out there that many people would love to do but the money just isn’t good enough for their standard of living. Perhaps a dog lover who might go work at a dog grooming place in retirement. I don’t think there would be much stress in that. Or for example, my grandpa loved fixing electronics, so he fixed TV’s part-time for a local TV shop until his health failed. I for one would love to work in a greenhouse, but there’s not much money in that. Maybe in retirement. The idea is that these hobbies don’t take up much of your time if you don’t want them to, but they are being put to good real-world use.

I do agree just working to work is not a good idea.

Hi Marshall–

You bring up a good point. In fact, the dog example fits my wife. She talks about becoming a yoga instructor or a dog trainer when we reach PIRE.

Maybe we should look at how we frame working in retirement.

If it’s something you’d have done anyway (tinkered with electronics, training dogs, etc.) and you happen to get paid, that’s not really a job, or, at least, it wouldn’t detract from your happiness.

If you’re doing something that you wouldn’t have done anyway (say, part-time consulting) because you perceive that you need the money or you feel like your brain will go to mush if you’re not working (see Doug’s comment above), then that’s a job that will detract from happiness.

Excellent point. Thanks for bringing it up!

Maybe I’m too young to know, but the reason I’d keep working is just because I love it and am addicted. I think that’s what Warren Buffett does (I don’t think he gets up every day and says “I want to be mentally sharp today.”).

I can point to many people I worked with in television who were well past normal retirement age, had tons of money, but still loved the job enough to keep coming in every day. Cheryl had a partner when we lived in Michigan who also kept working in his 90’s…..same story. Very happy and working full time during “retirement” years.

Like the discussion with Marshall, perhaps we need clearer definitions of jobs and retirement. If you are paid to do something you’d do anyway (sports coaches and contributors to open source projects come to mind), then that’s not a working retirement that is going to kick in the Zeigarnik Effect. Remember, the key to the unhappiness is an uncompleted task rattling around in the back of your head. Doing what you love doesn’t create an incomplete task in your head.

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