Are You Working Too Much?

Retirement Planning and an Unbalanced Life

Perhaps the biggest challenge to retirement planning is the sheer number of unknowns. How long will you live? How will the market perform when you’re living entirely off your portfolio? How much will healthcare costs increase? In the face of all these unanswerable questions, what most people choose to do is to just keep working – after all, it’s better to have too much income than too little.

While that rationale makes logical sense, it can also lead to life out of balance.

One of life’s great teachings is, to quote the Greek poet Hesiod, that “moderation is best in all things” – not too little, not too much. We see this at play in virtually every aspect of our lives:

• Exercise. Too little exercise often leads to lethargy, muscle loss and an increased risk of health problems like heart disease, diabetes and cancer. Too much exercise, though, can lead to injury, heart damage and even organ failure. The right amount is somewhere in the middle – not too little, not too much.
• Food. Too little food can lead to malnutrition and starvation; too much food can lead to obesity and early death.
• Career advancement. It’s common to want to see your work rewarded with a promotion – particularly if it’s also accompanied by a pay raise, more authority and the respect from others. But promotions also come with more meetings and bureaucracy and fewer opportunities to do what you enjoy, both inside and outside the office.

Achieving the right balance is essential to achieving happiness in so many aspects of our lives, from time spent with friends to how we raise our kids. But what about the money you’re putting toward retirement? Can you be working too much, despite all the unknowns that accompany retirement?

The answer is yes – if you’re focused so much on tomorrow’s wealth that you’re missing out on today. Consider the following all-too-real example:

Bill is a sales executive for a national mortgage lender. He was with his former company, a regional lending institution, for 10 years before they were acquired by his current firm. His 30 years in the industry, including the compensation he received from his buyout, is easily sufficient to sustain his current lifestyle, and with three decades of prudent investing, he already has more than enough to retire. Thirty years of travel and long hours, though, have left him with neck and back pain, as well as regret for not connecting with his family more before his kids started college.

For many people – especially overachievers in lucrative industries – earning enough for retirement isn’t really in doubt. But years of hard work over long hours can take a toll on many aspects of your life:

• Your relationships. Is time spent at work keeping you from bonding with your loved ones? Your prime earning years often coincide with when your children are growing up, and by the time you’re retired and ready to reconnect with them, they’ve started their own lives as young adults.
• Your personal growth. When you’re working, you’re often not cultivating new hobbies or exploring new interests. According to a 2017 study by the Rand Corporation, 40% of workers 65 and older had already retired, only to un-retire later – often because they don’t know what else to do with their time.
• Your health. Long hours hunched over a computer screen or crammed into a car between job sites can result in a whole host of ailments when you’re older, including neck, back and foot pain.

So what’s the answer? Should you quit your job tomorrow? Probably not – but it’s worth examining your current choices to see if what you do and how much you work are aligned with where you find personal fulfillment. Be sure to keep in mind:

• The key is balance. Depending on your circumstances and plans for retirement, leaving your career too early could be as big a mistake as leaving too late. As in the examples above, it’s all about being aware of the trade-offs and finding the sweet spot for you.
• No one is better positioned to help you find balance than your Baird Financial Advisor. Not only do they have insight into what it will take to achieve the future you want for yourself, but they also are personally invested it seeing you achieve it. They can also help you determine if you’re in a position to “ease off the gas” and better enjoy life right now.