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HUNT VALLEY, Md. (TheStreet) -- In the first of this two-part series, we discussed the amazing leverage that can be gained, even in the case of an apparently floundering retirement scenario, when moving from a higher-cost-of-living area to one that is cheaper. But I fully recognize that while many will see this as an exciting retirement adventure, some would view it as a life-ending transition due to their attachment to their current home, especially if they're near family.

You do still have another option, and much as silver bullet No. 1 was summed up in one word -- "move" -- so too is No. 2: Work.

Retirees should consider continuing to work, but this doesn't mean full time or doing work that drains you. This is a license to create a dream job.

It's not what you think. If you're one of the many retired or soon-to-be retired who've dutifully labored for a lifetime, largely motivated by the vision of the day you'd be able to dance your way out of your office, never to return, I'm not intending to obliterate that daydream. In fact, the only way this second silver bullet will work is if you're able to find -- or create -- a vocation that gives you as much or more joy than being fully retired. And this isn't just advice coming from your financial planner, but also your doctor, as Anne Tergesen discovered in her 2005


cover story,

Live Long and Prosper. Seriously.

She quotes Dr. Jochanan Stessman, head of the geriatric and rehabilitation department of Hadassah-Hebrew University Medical Center, as saying, "There's a strong argument for continuing to work throughout life."

This doesn't mean you have to work full time; nor does it mean you should be doing work that drains you. This is your license to create your dream job and begin to plan a phase of life we'll call pseudo-retirement: You're working enough to keep your mind and body functioning at high levels with enough income to reduce your need to tap your nest egg. Let's look at this in the context of our hypothetical retiree:

Age of couple:



Includes a home worth $500,000 and a nest egg of $800,000


Mortgage of $200,000

Income need:



Social Security brings in $18,000 and the nest egg, at 4%, brings in $32,000, for a total $50,000.

This couple is making $175,000 in income, but they're burned out and want to retire ASAP. Unfortunately, if they take their Social Security benefit early -- at their current ages, relying on their nest egg to fund the rest of their $100,000 income need -- they'll be pulling 10.3% out of the nest egg, an unsustainable withdrawal rate that could sink their retirement ship before it even sets sail.

Here's the recommended course of action for the couple.

At age 62:

  • Begin to plan for the dream job, while adding $50,000 of $75,000 of excess income to their nest egg
  • Pay down mortgage with $15,000 per year of excess annual income
  • Ensure that the nest egg is invested with capital preservation as the primary objective, assuming 5% rate of return

At age 66:

  • Transition to the dream job, accepting lower pay -- $100,000 -- for full-time jobs they fully enjoy
  • Stop saving for retirement, but allow Social Security to continue to grow
  • Get the mortgage paid down to $94,093 and stop extra principal payments
  • Allow the nest egg -- now $1.2 million -- to grow, conservatively invested to earn 5% per year

At age 70:

  • Scale back to part-time work at dream job
  • The mortgage balance is now $31,062
  • Take Social Security benefit at $30,927 and income of $50,000 for a total of $80,927
  • With the nest egg at $1.4 million, additional income needed is $19,073 or 1.3%

At age 72:

  • The mortgage is paid off, reducing income need by $19,000 a year
  • Social Security benefit is $32,176, with 2% inflation a year
  • The nest egg is at $1.6 million (4% = $63,354)
  • Income need is $81,000

Current income (Social Security plus 4% nest egg) = $95,530 (with a $14,530 surplus to be re-invested)

The purpose of retirement is not necessarily to


work, but to work because you want to -- not because you have to. For baby boomers fearful their dreams for a fulfilling retirement have been dashed by the market and faulty assumptions, the two retirement planning silver bullets of moving or working can be made to work.

But they require you to take this analysis from the hypothetical to reality.

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>>In Your 50s? Moving Is a Silver Bullet

>>In Your 50s? Think Financial Independence

>>In Your 50s? Oprah's Homes Teach a Lesson

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Tim Maurer, CFP, is vice president of

Financial Consulate

, based in Hunt Valley, Md., and a member of NAPFA, the National Association of Personal Financial Advisors. He can also be found at


This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.