Mar 19, 2025
Making the decision to retire is a big deal, and signifies a major lifestyle change is coming. Let’s say you’re just four months away from your planned retirement, odds are you’ve been gearing up for this next stage and getting everything in order to enjoy your life of leisure for a while now.
You’ve got a decent nest egg and you’re ready to really hone your golf game. What happens, though, if a perfect job comes along in this situation?
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Let’s say you’re offered a position that’s five minutes from your house, with good benefits, no workplace drama or stress and a good friend who works at the same company and says it’s great.
Oh, and let's say that the job provides just half of your current pay — but the pay is pretty close to what your retirement income would be.
Should you stick with your plan for retiring in this situation or should you take the lower-paying job that allows you to get out of your current work environment sooner, keep insurance coverage for you and your spouse and delay collecting your retirement benefits to make your money last longer?
Here's what you should consider as you make this decision.
How will taking the new job impact your retirement savings?
When you take a big pay cut, obviously you’re not going to be able to save as much for retirement as you would at your current job. However, with only four months left to go until you stop working, chances are good that you weren’t going to be adding much to your nest egg anyway.
In fact, by delaying when you start drawing from your retirement accounts, you can end up in a much better place financially.
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Your money can stay invested and keep benefitting from compound growth instead of you beginning to make costly withdrawals. You can also delay claiming CPP and keep increasing your monthly benefit until as late as 70 years old, which could more than double. Instead of receiving $800 per month at 60, you will receive $1,775 at 70. That’s a big increase, on top of the fact you’ll also be growing your invested funds.
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How much income do you need to live on?
You’ll also need to consider how much income you need to live the lifestyle you'd like to live in retirement. While your new job may provide an income similar to what you’ll earn in retirement, continuing to work rather than being at home can come with added costs.
You may have more commuting expenses, for example, although that should be negligible with the office just five minutes from your house. However, you may also be more likely to buy lunch at work or need costlier work clothing, which can mean you need a little more money.
At the same time, keep in mind that working longer will likely increase the income you eventually have as a retiree. If you have more of a cushion to live on in your later years because you take this new job, you may be better off — especially given uncertainty around the nation's economic prospects in the near future.
Would retirement make you happier than working?
Your happiness matters when it comes to retirement decisions. If you have been looking forward to retirement and don’t want to spend more years working, then you should likely not put off quitting even if the perfect job comes along. Especially if you already have enough money to retire.
And with 30% of retirees being at risk of becoming socially isolated, it may be prudent to take a new job if it will help you maintain social connections. You can always work on your golf game on the weekends.
You should carefully consider all of these issues as you decide what’s right for you. An unexpected change in circumstances can be shocking when you had plans in place, but it may just end up being a blessing that makes your future retirement a much more enjoyable one.
Sources
1. Government of Canada: Deciding when to start your public pensions
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Christy Bieber a freelance contributor to Moneywise, who has been writing professionally since 2008. She writes about everything related to money management and has been published by NY Post, Fox Business, USA Today, Forbes Advisor, Credible, Credit Karma, and more.
Managing Money • Feb 27
