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Is it Better to Retire or Keep Working?

Is it Better to Retire or Keep Working?

April 18, 2024

Is it Better to Retire or Keep Working?

For many, retirement is the realization of a decades-long dream of ceasing work so that they can finally enjoy what’s most important to them:  Hobbies, travel, time with friends and family or, just waking up slowly as if every morning is Saturday!  Regardless of what exactly a person is dreaming of when they can afford to stop working, it’s important to ask the question: Does retiring have the positive impact on our wellbeing that we think it will?  We’ve all heard stories of folks who spend their life saving up for retirement only to atrophy without meaningful work.  Saving up enough assets to spend 20 or more years in retirement takes a lot of hard work and discipline.  So, it makes perfect sense to ask, is this really going to make me happy?!    As a practicing financial advisor, I’ve spent a lot of time interacting with retirees and I can tell you that some absolutely thrive in retirement and others, sadly, do not.  So, when is the optimum time to retire?


Perception vs. Reality

For decades, developed countries have created more and more protections against overburdening workers in terms of excessive hours worked, work safety, etc.  Considering this emphasis on the prevention of overwork and exhaustion for ageing workers, many people have a very negative attitude towards the idea of delaying their retirement[1].  However, reality is a bit more nuanced.  While there is certainly work that is overly straining and disruptive to healthy aging, there is a substantial body of evidence that shows when it comes to work, the adage, “use it or lose it” applies[2].


Work Works on You as Much as You Work on It.

Some argue that continuing to work until you can’t is beneficial, but continuing to work later in life isn’t, in and of itself, enough to enhance health and longevity.  Some types of work have greater health benefits than others.  Work that’s mentally stimulating and social in nature provides a greater benefit to health and longevity than less intellectually stimulating tasks[3].  Interestingly, vocations that are mentally stimulating in novel ways create the greatest health benefits so, it would seem, variety really is the spice of life[4]

The conclusion that can be drawn is that it’s not work per se that makes people sick or healthy in their latter years, but the specific characteristics of the work.  If work is physically or mentally exhausting, it can erode health, but if it’s social, intellectually engaging, and novel, continued work can significantly improve health and longevity. 


Good News and Bad News

The bad news is that there appears to be a large portion of the work force that’s aching for the day when they can finally just stop working, and that could be detrimental to their wellbeing, depending on how they intend to spend their years of free time.  Others, sadly, intend to endure an overly straining job that they dislike, and all the negative health effects to go with it, for YEARS in hopes of reaching their goal of not doing that job anymore.  The good news is, we don’t have to wait to retire to engage in activities that will benefit our health!  We can seek roles that are novel, intellectually stimulating, and social now; both vocationally and personally.  We can also create stronger social connections by serving our community, for example.

 So, knowing that the type of work you’re engaged in now, as well as, the type of activities you intend to engage in in the future all impact your wellbeing in retirement, when should YOU retire? 

In their book Retire Right: 8 Scientifically Proven Traits You Need for a Happy, Fulfilling Retirement, Frederick Fraunfelder and James Gilbaugh give these well-researched guidelines for knowing when you’re ready to retire:


  • Take a serious look at your financial fitness (with a professional): The data indicates that not being able to maintain your standard of living is a substantial contributor to unhappiness during retirement.

  • Location, Location, Location: Assess your living situation.  Being able to live in an environment in which you feel happy and in control leads to greater happiness during retirement.

  • Go with Your Gut: Take some time to think about your satisfaction with your work and what would be the most meaningful use of your time.  There’s a good chance that it won’t be as simple as spending every day at the beach or the golf course.  Explore your ideas about how you plan to spend your time with your close friends and family, especially those that have already retired to gain insights on when retirement might be right for you.


By creating a plan and being thoughtful about the tasks we will engage in throughout the course of our working lives and after we retire, we can make a more informed decision about when retirement is right for us, thereby improving our overall wellbeing , for years to come.


[1] Source: Davies and Cartwright, 2011

[2] Source: Denney 1984

[3] Source: Potter, Helms, and Plassman 2007

[4] Source: Bielak, Hughes, Small, & Dixon, 2007