Should I Get a Job Now as a Hedge for Tomorrow?

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Should I Get a Job Now as a Hedge for Tomorrow?

Get a job???? Isn’t this a site focusing on financial independence and the option to retire early?

Easy, tiger – no need to come out fighting right off the rip. Don’t get out your pitchforks to tell me that we didn’t retire with enough money. This is more of a hypothetical than anything.

I’m confident that we have enough money to last us the rest of our lives. Our net worth has actually grown dramatically since I retired at the end of 2018 – even while living off our portfolio.

Additionally, the bucket strategy we use keeps us from needing to sell in down markets. And our spending has stayed in line with our budget, even while frequently traveling and vacationing.

So I feel really good about where we’re at financially.

However, as with most things in life, resting on your laurels has the potential to cause you to get bit in the butt. It’s always a good idea to proactively pause and reflect on the direction you’re going and consider the what-ifs.

Times are good in the employment world with jobs being easier to come by. Employers are practically begging to get workers so the pay can be really good. When you see headlines like “Target raising wages up to $24 an hour”, it’s smart to take a moment to pause and reflect.

Would it be worth it to get a job?

Even a small part-time job could bring in some nice supplemental income. I’m sure we could find a way to have a little more fun with even more spending money or sock it away to build up a bigger security blanket.

The reality is that you don’t want to be forced to get a job at a later stage in life when it’s easier to get one now if needed. So should I get a job as a hedge for tomorrow?

That’s what we’re going to look at today…

Could our expenses go up to be more than we can afford with our portfolio?

Of course!

The four biggest questions on expenses that currently come to mind are:

  • Will our costs be higher in the U.S. than they have been in Boquete, Panama over the past few years?
  • Will the expenses from raising our daughter increase over the next few years?
  • What if we want to upgrade our lifestyle more down the line?
  • Will the cost of a dramatic rise in inflation devalue our money?

Panama to the U.S.

We’re anticipating that once we move back to the U.S. from Panama in April, our spending will actually be very similar or just slightly more than it is now. Surprised by that?

I’m not going to dig into that too much in this post, but here are a few of the biggest reasons for that:

  • Instead of aiming to lower our cost of living while living in Boquete, we pushed up our quality of life and lived it up a little more.
  • Because of how the system works, our healthcare costs will be only slightly higher than they are now thanks to subsidies we’ll be able to take advantage of through the ACA marketplace.
  • Some expenses, such as groceries, can indeed be done cheaper overall in the States. It’s tough to beat the price of the fresh fruits and vegetables here. And grocery prices in general in Boquete tend to be slightly cheaper overall than many grocery stores in the U.S. However, our grocery bills are dramatically more than they would be when leveraging low-priced stores like Aldi in the U.S.
  • We’re going back to northeastern Ohio where the costs are already pretty modest anyway.

Assuming we go back to living our modest lifestyles in Ohio, our costs shouldn’t go up very much. We’ve also discussed the possibility of living in a lower-priced apartment just to give ourselves even more breathing room for more travel.

The one cost that will likely add a little weight to our first year will be furniture. Remember, we sold almost everything we owned when we moved to Panama. We’ve already decided that we’ll be buying mostly used furniture, but we’ll still need some regardless.

They grow up so fast!

Our daughter will be just shy of 12 years old once we’re back in Ohio.

Everyone always talks about how expensive kids are to raise but we really haven’t seen that. Sure, there’s some additional cost, but I haven’t noticed anything crazy.

But, we’re also not done raising her either. We still have to endure the teenage years, which should be fun. I would guess our grocery bills will go up as well as some costs for extracurricular school activities (once she goes back), a used car, and more.

We continue to save some money for her college education in a 529 plan, but she’ll be taking out loans for some of her education. She already understands this and plans to aim for scholarships or start with a community college. It’s nice having a kid who you’ve been teaching personal finance religiously to over the years – she gets it. I wish I did when I was her age!

Living it up!

We already do quite a bit of traveling. But what if we want to start doing bigger or more expensive trips? Would I need to get a job to be able to support that?

Perhaps we decide that we want to move back into a house that’s way too big for us again in the suburbs. It’s definitely not on our radar right now, but that could change.

Or we might decide to be snowbirds. It was easy to live in Panama since we were solely living in Panama. That meant one rent payment. As snowbirds, we’d either have to do shorter leases in Ohio (which I’m sure would be more expensive per month) or suck it up and be making two rent payments – one in Ohio along with another wherever we’re escaping to.

I remember when bread cost a nickel!

Yeah, inflation sucks for savers. If you’re not careful, it can erode your stash… what a thief!

A little inflation is good. It’s good for the economy and we even account for that in our drawdown plan.

But runaway inflation ain’t so good and could really be detrimental to our long-term plans.

Is that what we’re starting to see happen right now? I couldn’t tell you. The best I can recommend is being aware of it and jumping on opportunities to help mitigate it along the way. A good example was buying into Series I Savings Bonds for as close to a risk-free investment as possible with an extremely good return.

None of these are sure things. They’re just some random what-ifs. Nevertheless, it’s always important to be aware of these possibilities so they can be planned for if needed.

Does that mean I need to get a job?

Could our future returns be less than the past?

Absolutely. In fact, the projected market returns over the next decade don’t look as great according to many of the folks who study this stuff…

Three primary factors are behind the forecast for reduced returns: low interest rates, low economic growth, and equity valuations.

Schwab’s 2022 Long-Term Capital Market Expectations

These are a dime a dozen and you can find plenty of others pointing in the other direction. The point though isn’t to pick who you believe – these are all just predictions. Many are educated forecasts but it’s important to remember that they’re still guesses regardless.

Instead, you should hope for the best and plan for the worst. I sure would love it if that long bull run we had until recently would get back to doing its thing until the day I die. But alas, I’m not going to count on that.

Basing your entire early retirement on the 4% rule isn’t the best idea either. It’s a fantastic tool just to give you some context on how much money you want to save up in your portfolio. However, it’s all based on historical data – no one knows what the future holds.

You can then go on and analyze what the right safe withdrawal rate is until you’re blue in the face. I leave that to the smarter folks like “Big Ern” at Early Retirement Now. He does a fantastic job of deep-diving into the analytics of things. If you want to jump into the rabbit hole, check out his Safe Withdrawal Rate Series.

But is he right? Hard to tell until you’re on your deathbed.

What else could the old “get a job” help with?

Energy now versus later

If you need to get a job at some point, it’s better to do it while younger. Your body and mind are more up for the task and you’ll probably be able to command a higher pay while in your prime. I think it’s a safe bet to think that I have more energy and drive now than I will later in life.

The value of money over time

Probably the biggest benefit if I were to get a job is that we’re already financially independent so even a small salary can reduce what we need to take out of our portfolio. And with that, our money can remain invested and continue to grow. The effect of compound interest on money left alone to grow is much more valuable than money earned later in life.

Effectively, we could lower our withdrawal rate, which is always a good thing.

Social Security benefits

Social Security is also something to consider. I’ve already put in enough time to qualify for Social Security benefits later, but could I get that number to be higher by working more now?

I could… but if I were to get a job working something like 15-20 hours per week, it ain’t gonna matter. I earned some pretty good money in my career so I would need to go out and find a high-paying full-time salary somewhere. More than likely, that would mean going back to a career and I have no interest in that.

A “top-off” job could be easy and fun

I spent a handful of years working at Walmart in the mid-’90s. I actually had a blast working there. Granted, I was around 20 years old at the time, but it was still a low-stress job and an opportunity to work with some fun people.

I even had the chance to be a part of a Walmart commercial over 25 years ago…

But I’m sure times have changed. Who knows if it would still be an easy way to have some fun and earn a few bucks along the way?

So, should I go out and get a job?

Here’s the thing – to go out and get a job might seem like a no-brainer. Times are good, so why not? Work until you die and you’re all-but-guaranteed to have more “security” in your life.

But there are a few important pieces to this that need to be considered:

The potential issues are all just what-ifs.

I can’t tell you if none, some, or all of these are going to come true. No matter what you do, there will always be what-ifs in life. If you live life always afraid of what might happen, you’re not living life.

I belong to a great mentoring community called Millionaire Money Mentors. It’s a great place to share and learn from others. In a recent thread, Doug “Nords” Nordman from The Military Guide responded to others with something that resonated with me…

[H]ow much more life energy do you want to trade for external cash flow (and its emotional security) that may not be financially necessary?

— Doug “Nords” Nordman – Millionaire Money Mentors

In other words, there are always things you can go out and do to bring in more money. The question is, “Is it necessary?” And maybe it is, maybe it isn’t. That’s going to be personal to each of us and something we all need to decide for ourselves.

I’m comfortable with our finances and our lives. I don’t want to get a job doing something I don’t enjoy just to prepare for something that might not happen. With that said, I’m fine with making money doing something I enjoy…

Going out and getting a job isn’t the only option.

We do plan to keep seeing a little income floating in to ease any potential burden. But this is on our terms more than anything.

Lisa plans to go back to work part-time once we move back and get settled in. It’s not going to be a high-paying position, but that’s not what she’s after. She just wants something to fill her day a little more, so the money is secondary… and that’s awesome.

No matter, every little bit counts and each dollar earned is less that we have to touch in our portfolio.

For me, I still enjoy writing and managing this blog. I generally write one post a week and it’s fun for me. Any more than that and it would start to take away from time with family. That I wouldn’t enjoy.

Right now, I earn a little money from it (it’s taken years though to make this happen!). Year-to-date, I’ve been fortunate to make a little more than $2,300. Considering last year I earned just under $5k total, this is a good start to the year.

Again, it’s not about bringing in the big bucks though; it’s about having the choice to do what you want. Any money made is just icing on the cake and simply helps pad our buffer of security.

With Faith growing up, our free time will continue to grow and I can put more focus on building the blog up some more, which should likely produce more income. But the goal is to only do that if I decide that I want to spend more time on it… time will tell!

It’s always fun to put my thoughts out there. As I write out things like this, it helps to put things in perspective.

I don’t need to get a job when we move back to the States… and I probably won’t. If something fun crosses my sights though, who knows? The reality is that life’s too short to pick up a crappy job if I don’t need to. But having some fun and making a little money along the way never hurts either!

Plan well, take action, and live your best life!

Thanks for reading!!

— Jim

You know you wanna share this!!

26 thoughts on “Should I Get a Job Now as a Hedge for Tomorrow?”

  1. Jim, it’s always good to keep an open mind and reflect on your life’s possibilities. As Faith gets more and more involved in extracurricular time (she will), you’ll certainly find yourself with more “free” time. Where and how you use that time is the essential question to ask in retirement, and there’s certainly nothing wrong with using some of that time in a fun part-time job. Think long, act slow, and (as you’re doing) consider all of your options. I’ve been enjoying my small amount of Board of Directors work, and the unexpected income is certainly a bonus. Find yourself a Board job, or you could always go into acting….wink.

    1. Yeah, that’s a cool gig you’ve got going with the Board of Director’s position… nice job on that!

      I think my acting career wouldn’t work out so well. My Walmart commercial and House Hunters International episode are living proof of that! ?

      But you’re right – the beauty of financial independence and retirement is being able to pick and choose what you want to do. If you enjoy it, great. If not, move onto something you do… welcome to Walmart, would you like a cart? ?

  2. Jim, great post. Your whole post is what my wife and discuss every time we change our retirement date to sooner. We debate the time being lost with our kids now to working later once they are a bit older and dont want to hang out with us. We feel sometimes that the benefits outweigh the risk of just working or having to work a few more years later vs the time lost now.

    1. Thanks, Nadeem – I can completely understand the mental dilemma there. I had the same thoughts but in my case, I just couldn’t pass up the time to be with my daughter while she was younger even though it likely cost us making more money over the long run. But that’s a personal decision and a tough one to make.

  3. It will be very interesting to see if you can find a cheaper apartment in Ohio when you come back. The landlords are increasing rents trying to make up their loss they took during Covid. I have a house full of furniture and the house in NY that I need to sell since we have permanently moved to FL a instead of doing the snowbird thing. Just too difficult owning two properties in two different states. People who are renting here in Florida for the season have seen their costs dramatically rise this year also. Have a great vacation and your remaining time in Panama. I’ve enjoyed seeing the sights!

    1. Thanks, Nancy – I was looking at a few apartment complexes online that I’ve had in mind and the prices still looked to be in the right ballpark. Hopefully they stay that way since your point about increasing rents is something I’ve been hearing quite a bit about as well. Fingers crossed!

      Best of luck on the sale of your house in NY – I hope you do well on it!

  4. I highly recommend doing some work in retirement, at least at first. But only if it is fun and pays you at least as much as you made in your best previous full time job (on an hourly basis). No way I’d be a barista or cut somebody’s grass for $20 an hour. I know what my time is worth and I’m not giving it away at bargain prices. Except I do give a lot of it away for free now as a volunteer. So that’s what I recommend, if you do paid work do it at your normal pay scale, otherwise just do unpaid volunteer work. Or, like me, do some of both.

    1. Surprisingly, that’s something I hadn’t even considered – ensuring I make more than when I was working. That’s pretty interesting though. It makes sense that you can be a lot pickier now and can take a pass unless you’re getting the pay scale you want. I’ll have to think about if that’s something I can make work for me as well. Thanks!

  5. I’ve been open to getting a job again since I left work in 2012. And I actually did do some part-time consulting from 2013-2015 at three startups. It was pretty fun actually, to experience start up culture in the San Francisco Bay Area. As I had never experienced that before working in banking.

    I think it’s just fun to hang around cool people and be helpful. So if you can make extra money to prevent a drawdown, that’s great. Most investors are losing lots of money in 2022 so far.

    And as a result, nobody is making fun of my Financial Samurai Safe Withdrawal Rate formula linked below anymore! But maybe they are, and they just don’t tell me 🙂

    I still have yet to meet anybody online who withdraws at a 4% rate. People got to stop fooling themselves.


  6. This is something I think about quite a bit. And part of it is assumption of returns, filling my day, and leaving a legacy for our son. We are not quite FI yet (thanks stock market) but we are well over 70% there. I am staying in my job for 4 more years to guarantee good health care (and I like what I do) but then we plan on moving back to where we are from, raising our kid there, and because all of our debt will be gone and we should have enough in our retirement accounts, I plan on just getting a part-time, or even taking a demotion (becoming an adjunct faculty and/or lecturer) to fill my time. This allows us the market to do its work and leave a larger financial legacy for our kid. I think he will be ok. He already knows the first rule of money. Whenever, I ask him what it is he says “pay yourself first” in his cute 3 year old voice. Cheers to you Jim.

    1. Wow, knowing “pay yourself first” at 3?! Impressive!!

      I really like your general plan. Sounds like a great way to balance spending time with the family while bringing in some extra dough (and keeping yourself busy!).

      Best of luck!!

  7. When Faith gets into her junior/senior yr. of HS, I highly recommend doing college credit plus. You will have Stark St. CC, Kent and Akron near by. Get credits for both HS and college. My youngest is getting his associate of science at Lakeland CC this May before he graduates HS. It will let him get his EE degree in 3 years if he stays on course.

    I’ve mentioned before that my wife works and I am retired. She covers the bills and that allows us to let the nest egg grow well not right now 🙁

    I’ve entertained the thought of working but unless it was local or remote…. ehh I’m going to keep enjoying where I’m at in life.

    1. I’ve had the college credits thing on my list to dig into more as Faith gets older so I’ll definitely make that a priority. That’s amazing that your son has been able to crush all that before graduation – good for him!

  8. Well you could do short time or part time gigs while your daughter is in school … you won’t miss much then … or some personal projects …. it depends on what is practical and/or interests you … something where you enjoy the social interaction and help others might be a good fit … keep your eyes open and try different things even – be adventurous 🙂

    1. That’s true – I didn’t even think of just doing short gigs periodically. Heck, I could even have some fun doing seasonal work if that sparks an interest when the time comes. We’ll have to see if something creeps up that looks like it would just be fun to do.

      Thanks for the thoughts, Michael!

  9. Good thoughts Jim. I got the One More Year Syndrome but definitely check out the local junior college and dual enrollment for high school. I’’m in FL and my son is not returning for his senior year at the local private school. He got into a program at the community college and it will be free. Also, each class will count as 3 college credit hrs plus saving over 13 K in tuition!!!

    1. That’s awesome, Glincoln – good for your son! That’s a huge chunk of money saved! I just was reading Scott’s comment to my daughter to help reinforce this idea with her… gotta make sure that’s on her mind as she gets closer to high school in a few years. 🙂

  10. Working after FI has always seemed like something I would do. Not sure if I would ever be comfortable having no income (your $5,000 a year definitely counts!).

    My wife and I recently bought a property in upstate NY to rent out as an Airbnb. So far has done pretty well and has decent cash flow. But it’s definitely not passive! (Thankfully we enjoy it and get to have a “free” vacation house!)

    So I could see doing something like Airbnb management or consulting in my current (actuarial) field post 9-5.

    Very thought-provoking post! Enjoyed the read 🙂

    1. That’s a good deal when you can find something rewarding to do. Hopefully, you don’t mind managing of the Airbnb. Assuming that’s the case and that you get the benefits of the place, that’s a huge win! Consulting’s a cool one too if you enjoy what you’re doing. 🙂

  11. I think working a bit after retirement is a great option. A little bit of work keeps life interesting. The income doesn’t hurt either. It’ll give you material to blog about.
    I’m running out of ideas these days. Idle life in Thailand is too idle. 🙂

    1. Haha, the double-edged sword of a blogger’s life in the idle life of Thailand… easy enough but it minimizes the pool of content, too! ? Well, I’ve found the Thailand posts fascinating for what it’s worth!

  12. Will From Buffalo

    So I noticed your doing a 529 plan for your daughter…..

    Let me float a more tax efficient option

    Instead of using after tax dollar to fil her 529 and only get a break on state income tax…

    Why doesn’t your blog business hire her as a contractor? (assuming your a solo or llc operation)?

    Here is how that plays…
    You daughter models for your site, providing a valuable service…or you could teach her to review comments or monitor other social media accounts on this brand.
    Your business pays her….your tax burden goes down (assuming you are in a higher bracket than she is).
    She…being of low income, will likely pay NO federal or state income taxes until shes making 8k+. If she makes under 3k from her contracting job to your company…..she wont need to file federal returns even.
    THEN she takes her income (if you want to go by the books….50% of her earned income) and puts it in a Roth IRA.

    Roth IRA’s can be used for higher education expenses…OR 5k towards first home purchase ….OR healthcare premiums if shes ever unemployed for a period (back door emergency fund is how I see it) … OR retirement if she gets a full scholarship or goes right to work out of high school.

    PLUS….(I am speaking for New York state in which I reside and have researched) …..the state you are in is LESS likely (DYOR) to count her Roth IRA into its complex calculation for figuring out student financial aid.

    The difference….you get a state AND federal tax break….as well as SSI.
    She pays no federal and likely no state income taxes.
    She has more options with those funds.

    Win Win Win….as long as you have positive self employment/business income.

    1. Thanks, Will – I guess great minds think alike! Almost exactly a year ago today, I published a post titled, How and Why To Open a Custodial Roth IRA at Vanguard. In it, I talked about how I did just that for Faith. Since then, she’s been doing modeling for Route to Retire when needed and the business has been paying her pay as a contractor… and of course, that money goes right into her Roth IRA.

      We still do the 529 plan as well, but I only add $125 to it each month. In the long run, I hope the Roth IRA becomes something she hangs onto for the long term to let that compound tax-free over the years… fingers crossed!

      1. Will from Buffalo

        Very awesome brother. I must have missed that post but stoked you know about it and are actionable on it.

        I do the same with my children and my business.

        I REALLY look forward to their later years (they are 5 and 2) when they can outgrow their model positions a bit and start to learn to manage entry level functions of the business like basic book keeping, handle customer service tickets, research, entry level social media marketing and of course….office cleaning lol.

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