As you may have noticed, remote work is booming. Coronavirus has caused a significant change in the workplace, possibly forever. A survey from the US Census Bureau and the Bureau of Labor Statistics indicated 4.7 million people (about 3.4% of the US workforce) were already working remotely before March 2020. After COVID-19 was declared a pandemic, 88% of organizations worldwide either mandated or encouraged their employees to work from home, found a study by Gartner Inc.
That’s a major shift, and for a lot of employees—a positive one. It turns out people like the added flexibility of remote work, and many say they’re not ready to go back to the office. According to a recent survey by FlexJobs, 65% of respondents want to keep working remotely full-time after the pandemic. And 31% would prefer a hybrid situation with at least some option for remote work.
The “laptop lifestyle” is not just for digital nomads or millennials anymore. Work from anywhere policies could have advantages for retirees and workers approaching retirement age.
Continue To Work Past Retirement
If you're not ready to fully retire yet, the growing acceptance of remote work could be great for you. The traditional path of “work full-time for 40+ years, then retire to a life of leisure at age 65” no longer holds true for many of us. Emerging new models of work are more flexible and can take many different forms.
As people live longer, they’re also working longer. Maybe you want to keep working to supplement your retirement savings plan, or help pay for travel and leisure activities. Or perhaps you simply want to work for the fulfillment it provides. Many 60-somethings see that their skills are still in demand and figure, why not keep at it?
Live Where You Want
It used to be, people flocked to larger cities because that’s where the jobs were. Now, remote work makes it possible to live anywhere with a good wifi connection. That means you can move to the country or a small town, and still leverage your skills in the workforce.
Imagine checking emails from your sunny balcony in Tuscany—no, really! A number of small Italian villages have advertised monetary incentives meant to attract remote workers. Other dreamy destinations like Dominica and the Bahamas have developed new longer-term visas aimed at remote workers, as well.
Relocate Sooner Rather Than Later
Every year, thousands of retirees flock to tax-friendly states like Florida, Texas, and Colorado for retirement. Thanks to new, more flexible ideas about work, you don’t have to wait until you turn 65 to move to a warmer climate or be closer to your family.
If your line of work allows you to work remotely, there’s nothing holding you back from relocating before you retire. But before you make a move, be sure to consider taxes. For example, if you head down to Florida, but work for a New York-based company, you may still have to file taxes in New York, even as a non-resident.
Save More Money for Retirement
There’s plenty of evidence that more at-home workers equal big financial benefits for companies. Employers save on rent and utilities, cleaning services, food, and property taxes. Not to mention enjoying higher employee retention and lower absenteeism.
But there are a number of savings benefits for employees too:
- Commuting - Commuting costs can include extra wear and tear to your car, gasoline, and tickets for public transportation
- Clothes - Working from home means no more suits, business casual attire, or dry cleaning services to pay for
- Food - Costs for “food away from home” including everything from morning coffee, lunch breaks, and even your evening meals may be reduced (think of all the times you picked up takeout on the way home because you were too exhausted to cook)
- Rent - If you decide to move to a cheaper city, you can literally save thousands of dollars a year on rent and utilities
- Tax breaks - If you’re a freelancer of self-employed, you may be allowed to deduct certain expenses from your taxes such as home office costs, healthcare expenses, retirement account contributions, and office equipment
All those savings add up to more funds you can put towards your retirement savings plan. And perhaps more importantly than money, you’ll save tons of time and help the environment—priceless!
How to Decide if Remote Work in Retirement is Right For You
Of course, remote work isn’t for everyone. Some jobs simply can’t be done remotely, and some people actually prefer the office lifestyle. While the added flexibility and work-life balance is a bonus for many, working from home (or the coffee shop or the beach) can be challenging if you have young children or other distractions.
For workers of all ages, but especially senior workers considering retirement, the switch to remote is an adjustment. It’s a personal decision that has to align with your lifestyle preferences—and yes, your financial goals.
- Do you prefer face-to-face communication?
- Are you tech savvy (or willing to learn)?
- Are office politics stressful for you?
- How much of your social interaction is focused around the workplace?
- How will remote work affect your financial plans for the future?
- How will remote work affect your tax situation?
- Where do you plan to live in retirement?
- At what age do you plan to retire, either full-time or part-time?
The secret to a great retirement plan is one that takes into account your values, your lifestyle, and your dreams for the next phase of life. If you’re unsure about what remote work might mean for your retirement plans, talk to your financial advisor. A qualified advisor, such as a Certified Financial Planner™ (CFP®) will help you assess your financial situation and plan realistically for the future.
Not sure if you’re emotionally (and financially) ready for retirement? Take the 3-Minute Retirement Readiness Quiz™ to find out exactly where you stand.