This is the 3rd in the weekly Series called Retirement Happiness. In this Series we discuss the issues and concerns about money, and how its various components are so inter-twined that sometimes we cannot see a solution to our constant fear of running out of money as we get older.
Part 7 – Extra Income myth
When someone who is retired says, I’d like a small part-time job, just to keep the grey cells working”….. nonsense. It’s the money they want.
Being on a fixed income with no chance of getting more, can be a real concern for many people – even those who actually have enough to see them through the rest of their life – and then some. For some it’s a power thing, for some it’s an arithmetic thing, while some just want a little extra. No matter what the reason it is all justifiable and nothing to be ashamed about. If you can work out a way (legitimate of course) to add to your retirement monies, then go for it.
One of the biggest problems in doing that of course, is that the working community have this magical belief that the day after you end your illustrious, educated and intelligent working life, you become stupid overnight. The scrap heap beckons. Rubbish in other words.
Broadly speaking, the chances of you getting a meaningful part-time job are pretty low. Yes, you can work in your local home store and that’s fine. However, if you were say a teacher, or a lawyer, or a secretary, then your skills will not be required. You just have to get over it. The “kids” who are doing the hiring are not going to hire you at your skill level. Simple as that.
The best response to those youngsters is to remind them that one day they will be asking the same question to some other kid. Then they’ll find out how dumb they’ve apparently just become. Laugh and move on.
So, if you are approaching retirement, and you feel that a little extra income would be useful, be warned right now – it ain’t gonna happen.
Many people in retirement would like to open a new business, maybe using their skills and experience. Maybe they have many contacts in their field of expertise and feel they can rely on them to help them out with a new venture. Also, some folks reckon that a complete change of pace might suit them – so they open a craft shop, or buy a small boarding house, or start a market garden business, or start a per care business, etc, etc. This might work. But that’s about as strong as can be said.
Starting a new business, especially if medium-to-large amounts of capital are needed, is a risky business. It means that you are dipping into your nest egg with no alternative safeguard of cash inflows from external sources. So if the new business doesn’t work out then your nest egg is depleted and in all probability cannot be replenished. Think carefully.
Finally, don’t go into retirement believing that any shortfall in your nest egg will be boosted by part-time income. It won’t. You might get some small amounts of money, but if the hole is even slightly more substantial, it won’t be filled. Be aware.
You should be able to instruct your pension provider, and in turn, the investment manager of your pension fund, what tolerance level you have for your investment decisions, ranging from “conservative” to “aggressive”. It is not an easy decision to make, especially to get it consistently right, so every appropriate financial advice must be taken. This is a broad overview and by no means can be classified as solid advice in your case. Be careful.