Why Working Longer Could Be Life-Changing for You

What if I told you that by working just 10 years longer, you could reduce the amount you need to save for retirement by up to 96%? Not 9.6%—96%. That's not a typo, and there are no gimmicks involved. This single decision could free up thousands of dollars every month to enjoy your life right now.

The Hidden Cost of Traditional Retirement

Whether you're ahead of schedule when it comes to saving for retirement or you're playing catch-up, you're likely making sacrifices to your current well-being. Memorable vacations, quality time with family and friends, even your physical and mental health—all take a backseat to the goal of "hitting your number" by 65.

By opting into the conventional retirement game, you're prioritizing having a certain amount of money by a certain age over other, more important things in your life right now.

But are you sure this is the game you want to be playing? Will these sacrifices be worth it? Are you certain you'll be happy doing no work whatsoever for 30 years or longer?

The Arrival Fallacy of Retirement

In his excellent book "The 5 Types of Wealth," Sahil Bloom describes the "arrival fallacy"—our false belief that reaching a goal will create lasting satisfaction. Traditional retirement may be the ultimate arrival fallacy.

The growing "unretirement movement" confirms this, with a large percentage of retirees returning to work after discovering retirement wasn't what they expected. Some return for money, but many more return because they miss connection and contribution.

I want to invite you to stop playing this game and instead focus on how you might arrange your working life in a way that brings meaning and fulfillment so that you won't want to retire from it.

Finding Work You Love Changes Everything

Look, if you hate your current form of work, I'm sure the idea of not having to do it anymore seems amazing. But just because you hate your job doesn't mean you'll love not working at all. If you hate your job, I don't want you to do it any longer than necessary.

However, finding work you don't hate and planning to do it longer can unlock an incredible amount of flexibility in your life right now.

How much flexibility? I'm glad you asked.

The Numbers That Will Shock You

Once you plan for the likelihood of continuing to work beyond the age of 65 (or whatever number you probably chose without giving it much thought), you immediately have more money and more time to spend on people and things that fulfill you now.

If you were planning to retire at 65, you were told you need to save a certain amount each month to hit your goal. Once you plan to work longer, that number goes down dramatically. You have more time to save and you're allowing your money to compound for longer.

Let's see how this plays out with a real example.

A Tale of Two Tonys

Meet Tony, a 45-year-old earning $150,000 per year, who has $150,000 in his retirement account. If he wants to retire at 65, he will have to save $2,390 per month for the next 20 years. This is almost 20% of what he's currently making—a non-starter for most people.

Tony only agreed to 65 because that was the age suggested by his financial advisor, based on the fact that "this is the age most people choose to retire."

However, Tony likes his work and his colleagues and can't imagine stopping at 65. He might not always be with his current company, or do this type of work, but he's fairly confident he'll likely want to still be engaged well beyond 65. So, he asks his financial advisor to run the numbers to show what he will need to save if he works until he is 75.

I want you to guess how much less he will need to save as a result of working ten years longer.

Do you have your number?

The amount Tony needs to save drops from $2,390 per month to just $110.

That's right—ONE HUNDRED TEN DOLLARS PER MONTH.

His required savings is reduced by an astounding 96%! Even if Tony plans to only work until he is 70, the amount he will need to save is only $607 per month, which is approximately 75% less than required to retire at 65.

Remarkably, even working just one extra year reduces his required monthly savings by 20%.

Why This Works So Powerfully

In both scenarios, Tony lives until 95. In the first scenario, he has ten fewer years to save, ten fewer years for his money to compound, and needs the money to last for 30 years.

In the second scenario, he benefits from ten extra years of saving, ten extra years of allowing his money to compound (since his income is covering his bills), and he only needs an amount of money that will last for 20 years.

We've all seen articles touting the benefits of starting to save in our 20s to take advantage of compounding interest. If you're like me, they just frustrated you because you didn't take advantage of this opportunity. Even if you did save early, you were probably earning much less than you are now, and weren't able to save an amount that would have a meaningful impact.

What people don't often talk about is that we can achieve the same powerful results by deferring when we take the money out.

Reclaiming Your Life Now and Later

Your life doesn't have to play out like the traditional retirement story. Maybe you make more money than Tony. Maybe you make less. I share this comparison because I want you to see how planning to work longer can unlock an enormous amount of flexibility for your financial situation and life.

If you have been making sacrifices, consciously or otherwise, let this be a reminder that living a full life doesn't mean being mostly focused on saving for the future and forgoing the things that matter to you. Living a full life means enjoying life now AND later.

The Complete Guide for a Better Life – Now and Later

In my book "Let's Retire Retirement," I explore how this simple shift in thinking can transform not just your finances, but your entire relationship with work, time, and fulfillment. I provide the tactical and practical advice for designing a life so good you'll never want to retire from it—while enjoying more of your time and money today than you ever thought possible.

The assumptions used in this scenario are as follows:

• Expected annual increase to income: 3 percent

• Pre-retirement income desired in retirement: 70% (based on the household income earned during the year immediately before Tony's retirement)

• Age at death: 95 (this translates to a 30-year retirement in the first scenario and 20 years in the second)

• Rate of return on investments before retirement: 7 percent

• Rate of return on investments during retirement: 6 percent

• Rate of inflation: 3 percent