Christy Bieber, The Motley Fool
4 min read
In This Article:
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A Reddit poster retired at 48, but he's going back to work in response to concerns about the economy.
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The poster is disappointed in his decisions and feels he should trust in his investments to see him through.
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The poster didn't necessarily make an error by retiring -- and going back isn't necessarily an error, either.
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The $23,760 Social Security bonus most retirees completely overlook ›
If you retire and then go back to work, did you make a financial mistake? This is a question that a Reddit poster recently asked. The poster explains that he had retired early at 48 years old, but has now signed a contract for a new job.
His issue is that he is "disappointed" in himself for returning to work because he wanted to trust that compound interest and his wise investments would see him through for life.
He has $4.38 million in total assets, including real estate, retirement, and brokerage accounts, and feels like that should be enough, but fear is driving him back to work. Specifically, he's scared of market turbulence and the economy tanking.
So, did the poster make a mistake in leaving work and then returning? Did he derail his finances for good, and should he be disappointed in the decisions he's making?
Everyone's situation is different, of course, but there are a great many people who retire and then return to work. In fact, the 2022 Retirement Saving & Spending Study from T. Rowe Price found that 20% of retirees were working either full-time or part-time, and 7% were looking for work.
All of these retirees, and the Reddit poster, are not failures for deciding to return to the workforce. In fact, as one Reddit commentator suggested, it is not a failure to respond to changing market conditions, but rather a strategic choice to return to work and build a larger cash cushion.
Now, the poster may be fine with $4.38 million in assets, as long as he maintains a safe withdrawal rate. But it's just as important to feel comfortable with the size of your nest egg as it is for your nest egg to be large enough to support you -- so if going back to work provides the poster with added peace of mind, there's no real downside to doing it.
The Reddit poster also felt like he should trust in compound interest rather than returning to work.
As a general rule, the poster -- and anyone else who is invested -- should have investments they feel confident in, and should try to make sure they have the right asset allocation to get through turbulent economic times. Hopefully, the poster did that. If he did, maybe a return to work wouldn't be strictly necessary, since he does have more saved than most.
