Managing your financial life is not just about money.

Do I chose to work part-time in retirement?

This is article number three in a series on retirement. In this article I answer questions 3 and 4 of 32 questions you need to answer before you retire. I have no idea how many articles will follow this one, but eventually I will address all 32 questions.

  1. Do I choose to work part-time in retirement?

pexels-photo-213314No, this is not a dumb question.  More and more folks I work with choose to work some for the first few years of retirement.  Some just need to keep active, and those part time earnings get used for fun things, or kids and grandkids. Some people I know choose to work for free in retirement and volunteer their time for numerous charitable or non-profit institutions. There are even organizations that exist to place volunteers with those entities in need of volunteers. is a place to start.  Fire up Google and look around.  And some people choose to do some kind work or activity just to get out of the house. My maternal grandfather and grandmother were married and retired for a very long time. Grandpa Joe used to say that the marriage worked because he spent a lot of time not at home. Nana agreed!

There are some people that will need to work part time for compensation for retirement to be successful.  If you need to make some good money in retirement, it is probably a good idea to look for work that you are qualified to do. The best situation would be to continue to work for your existing company on a part time basis. If you don’t need to earn much money to make your retirement work, or if you really hate your job, maybe you do something completely different from your work.

The most important thing to do, if you need to work, is to start planning early for this.  Talk to your boss; do some research; reach out to friends and family and let them know you are looking. The reason for this is simple. When we craft a retirement plan for people who must work in retirement, we ask them how much they can earn, what is their definition of part time, and how long do they plan to do this work?  The answers to these questions are mighty important. We need good data, and so don’t you.

  1. Can I retire with a mortgage and/or a home equity line of credit outstanding?

The short answer is maybe, but it won’t be easy.

Plan A should be to not have a mortgage in retirement.  A rule of thumb is that people need to cut their expenses between 20% to 35% to be okay. Well, take a look at what percentage of your expenses your principal and interest payments on the mortgage (and maybe Equity Line of Credit) are. My guess is 20% to 35%.  And there you go!  Chances of a successful retirement are usually higher with no mortgages and zero balance on your equity line of credit. If possible, try to clean up that equity line of credit before retirement. Get those home improvements out of the way and paid for before you retire.

If you can pay down your mortgage before you retire, it would be a good thing.  However, if you can make your 20 year mortgage a 10 year mortgage by the time you retire, you might feel good, but you still have 10 years of mortgage payments that would crimp your fun budget.  As counterintuitive as it may seem, you might be better off refinancing that 20 year mortgage to a 30 year mortgage with a lower payment in retirement. One of my favorite sayings is that it does not matter if you have a mortgage in retirement, as long as you can afford to pay for it.  That is the hard part.  Think of all the fun you could have with those mortgage payments if you didn’t have that mortgage.


The questions for the next article are:

  1. How long will I live?
  2. Am I living in my retirement home?


Michael J. McNamara Ph.D., CFP®


*Any financial advice in this article is intended to be generic in nature. Readers should consult with their own financial advisors before implementing any advice or suggestions above.

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