Control Your Retirement Destiny

Chapter 11 – “Working Before & During Retirement - Your Human Capital”

March 22, 2019

In this episode, podcast host and author of “Control Your Retirement Destiny”, Dana Anspach, covers Chapter 11 of the 2nd edition of the book titled, “Working Before & During Retirement - Your Human Capital.”

If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon.

Or, if you are looking for a customized plan for your retirement, visit us at to see how we can help.


Chapter 11 – Podcast Script

Hi, this is Dana Anspach. I’m the founder and CEO of Sensible Money, a fee-only financial planning firm. I’m also the author of Control Your Retirement Destiny, a book that covers the numerous decisions you need to make as you plan for a transition into retirement.

This podcast covers the material in Chapter 11, on your human capital - your ability to earn a living.

If you like what you hear today, go to Amazon and search for Control Your Retirement Destiny. And, if you are looking for a customized plan, visit to see how we can help.


What is the biggest asset you have? Most of you will likely answer your home, or maybe your IRA or 401k account. If you’re a business owner, perhaps it’s your business that comes to mind.

This might be the correct answer, if you are about to retire, but what if you’re still 5 to 10 years away from retirement, or thinking about partial retirement? Your biggest asset could be your ability to earn income.

This is what we call your Human Capital. Traditional financial planning often ignores this important and valuable asset.

On Twitter, one podcaster who goes by the Twitter handle of “@ferventfinance” wrote that “95% of discussions, books, and articles on the topic of finances concentrate on budgeting, investing, and debt repayment. Yet, the one thing that will probably move the needle the most is increasing income.”

People are often surprised when we show them that the value of their future earnings can be in the millions. Even part-time work can be worth a lot.

Take the case of Marian, age 59. She works in IT with a stable job and a $140,000 per year salary that goes up with inflation like clockwork. To maintain affordable health care insurance, she plans to work to her 65th birthday. When you factor in the employer contributions to her retirement plan, and the health care benefits for her and her spouse, her remaining 6.5 years of work are worth a million dollars. Their total financial assets are $1.7 million, and their home equity is about $750,000. Her remaining human capital is a big asset. In percentage terms, it’s about 40% of their total net worth.

You would not be quick to walk away from a million-dollar account. Yet, some people walk away from a job without realizing the value of that asset. Once you walk away, in many careers, it can be difficult to get back in at the same level.

That means you want to give some thought to what retirement really means to you. For example, I have a client who is a CPA, in his mid-50’s, who asked me one day, “Dana, do you have clients who actually retire… and enjoy it?” He loves the business he has built and the challenges that come with growing a business. It’s hard for him to imagine getting up and not going to work each day.

I chuckled when he asked this question. Because, yes, I have many clients who retire and enjoy it. And a few who retire and end up back at work within a year because they found it so unenjoyable. Before you retire, you have to give thought to what makes you tick.

In this podcast episode, I’ll offer two different views on how you might think about, and use, your human capital. There is the “mercenary approach,” and the “thrive approach”. Then I’ll cover a few stories to help you figure out what retirement means to you. And I’ll wrap up with two tips on what to be aware of if you do work part-time in retirement.

I’ll start with the mercenary approach. This is about providing your time to the highest bidder.

I took the phrase “mercenary approach” from the book Die Broke, originally written in 1998 by authors Stephen Pollan and Mark Levine. I believe updated versions of the book are available. I read their original book a long time ago, and their concept stuck with me. In the book they suggest you maximize your career potential by going to wherever you can earn the most. Then you save as much as you can. In their book, if you follow their approach you slowly convert your savings into annuities to provide guaranteed income in retirement that replaces your earned income. I think this approach is interesting, and, no doubt, it may work for some.

It means potentially choosing work that is not fulfilling, in order to focus your human capital efforts to accomplish a maximum return on time invested.

This mercenary-like approach can be combined with an extremely downsized lifestyle to reach retirement far more quickly than you may think. This approach is currently referred to as the “FIRE” movement, F-I-R-E, which stands for Financial Independence Retire Early. Many blogs such as Early Retirement Extreme and Mr. Money Mustache cover this concept.

If your goal is to get out of traditional work as quickly as possible, following the FIRE movement makes sense. Financial independence can be achieved in a far shorter time period than you may think, but it requires sacrifice. The advantage is that once you reach financial independence, you then have the freedom to choose what type of work you might want to do—if you want to work at all.

Another version of the mercenary approach involves people who take high paying jobs overseas, or high-risk jobs on oil rigs, or in places like Alaska. Some workers choose this as a strategy. They want to make as much as possible as quickly as possible and then later on plan to “settle down” to a more normal life after hitting a specific financial target. Some might take on such a role for a year – others for five to ten years.

A more moderate approach is to spend time figuring out what academic programs, credentials, or certifications will help boost your income. Evaluate the financial cost of any program against the potential increase in income you might expect, and make sure you talk to many people in your industry to find out whether they think additional education will actually translate into increased income.

I went through this process in considering the CFA (Chartered Financial Analyst) designation. This is a designation held by many investment analysts, mutual fund managers, and institutional money managers. I am interested in the designation even to this day, but it involves a significant time commitment. The industry leaders I spoke with said that for the career path I was choosing, they did not think it was necessary for me. I listened, and instead, I have chosen other designations, such as the Retirement Management Advisor designation, that more directly correlate with the work that I do and the direction of my firm.

Overall, when I consider the mercenary approach and the FIRE movement, I respect it, but I don’t personally resonate with it. I prefer the thought of a life well-worked, which for me, means I need work that I thrive on. That takes us to the thrive approach.
The thrive approach is about finding work you love.
You start by figuring out what makes you tick and what type of work puts you “in the zone”. When you find a niche you thrive in, it changes everything. If you enjoy what you are doing, you are likely to work longer, and it won’t feel like work.

How do you find work you love? I’ve done all kinds of things. Career counseling, coaching, and online assessment tools to name a few. I want to share two big breakthroughs that I had.

The first was a coaching process called Rediscover Your Mojo designed by executive coach Lisa Stefan-Martin.

Lisa is one of my best friends, and she was my roommate for three years. So I had the benefit of daily executive level coaching conversations. Then, I went through her formal Rediscover Your Mojo process while it was in the design stage. At the time, I was frustrated with the direction of my business. I was looking for answers and hoping she could help me find them. To my surprise, what I got out of the process were valuable insights that have profoundly affected the way I operate on a daily basis. Professional coaching changed the way I make decisions. I didn’t get a nice neat “answer” about a career decision; instead I got tuned in to my internal compass. Now, it is far easier for me to find my own answers to tough decisions. I’ve worked with several coaches over my career, and I highly recommend it.

My second huge breakthrough occurred in 2010. I stopped trying to be like other people and started being who I was. And a funny thing happened: work no longer felt like work. Instead, each day it felt like I got to go play. Sure, there were tasks that I had to do that I didn’t love. It wasn’t completely Goldilocks. But it was different.

I owe the difference to the Kolbe A Index assessment tool. At the time I discovered Kolbe, I was struggling with one of my associates at work. I always had ideas and wanted to figure out how to do things more efficiently. I liked to follow the latest trends in financial planning and test out new software packages. My associate had more of the “if it ain’t broke, don’t fix it” mentality. One day, he said something to me along the lines of, “Why can’t you just be happy and leave well enough alone?” I thought about that for a while and wondered, “Well, why can’t I? Is something wrong with me?” Then I found Kolbe and through their assessment process, I discovered my Natural Advantage was that of an entrepreneur. No, nothing was wrong with me. I am supposed to change things. Instead of fighting myself I went full force ahead into seeing what I could create, and I haven’t stopped since. I love it.

Kolbe had such a profound effect on me that, in 2011, I chose to invest in its certification class and become a Kolbe Certified Consultant, simply because I wanted to know more. The more I learned, the more I became convinced that an incredible amount of progress remains to be made in the field of human capital. All employers should strive to build productive work environments. Right now, though, that task is likely something we each have to tackle on our own.

If your retirement income plan calls for working until age 70, and you’re currently 50, why wouldn’t you spend some time, and perhaps work with a professional coach, to figure out what type of work you thrive on? In my opinion, 20 years is too long to do work you don’t enjoy.

If you’re closer to retirement age but realize that traditional retirement is not for you, you’ll also want to do some soul searching. Brainstorm various ways you can use your upcoming free time in retirement to work on something you’ll find fulfilling.

Many in the 55–64 age range choose to start a business. The Kauffman Foundation shows the rate of entrepreneurship for this age group has grown substantially.

Starting a business isn’t easy. I’ll attest to that. Yet, if it is work you thrive on, even when it’s hard, it is still fulfilling. Be cautious though about risking your retirement funds on a business. You can risk your time. But maybe not your nest egg.

Of course, continuing to work is not always about choice. It is often a matter of necessity. The mother of one of my close friends spent every summer in Alaska working in a dinner theater well into her 70s. In this way, she was able to save enough over the summer to supplement her Social Security throughout the remainder of the year. She had to work, yet, she found a solution that got her out of the Arizona heat in the summer and allowed her to earn enough in a few months’ time so that, for the rest of the year, her time was her own.

If you must supplement your income, explore every avenue you can think of. Do you have skills, hobbies, or specialized training that can be used to generate income? Can you teach part-time or turn your craft into a saleable product?

A few years ago, over the Fourth of July, I stayed at a bed and breakfast in the mountains. The couple who owned it had recently retired, and this home was their retirement dream. They enjoyed people and entertaining. They wanted a beautiful house with a view, and by turning it into a business they found a way to afford it.

The town near their bed and breakfast hosts an annual arts festival. As I walked around talking with the vendors, many were retired, enjoyed traveling and had found a way to support their lifestyle by turning their craft into a source of income, which also enabled them to deduct many of their travel expenses.

There are numerous creative ways to use your human capital. Explore them all, just as you would explore options on how to use your financial resources.

Another thing I want to cover in this podcast is the concept of what retirement means to you. To illustrate, I’ll share three retirement stories. One for Dr. Barry, one for Mary and one for Ed.

Dr. Barry is age 80 and still a practicing physician. He works three days a week, down from four days a week a few years ago. When he and his wife last came in, I asked if he had any thoughts about fully retiring.

He said, “I am a doctor. I’ve been a doctor my whole life. When I go to the office, staff members are respectful to me. Students in residency come through, ask me questions, and graciously thank me for my time. Every day it’s Dr. Barry, Dr. Barry. If I retire, who will I be? I’ll be nobody.”
Dr. Barry loves—and thrives on—his work. If you are like this, retirement can be an unfulfilling experience.

Part-time work can help ease the transition to retirement, both financially and psychologically. On the psychological side, it allows you to slowly figure out what to do with your newfound leisure time.

On the financial side, part-time work gets you used to the idea of withdrawing money from savings to live on. I have seen many people who are afraid to retire, even though the numbers say they can afford it. The thought of withdrawing money from savings on a regular basis can be frightening. A gradual transition to retirement can help you get comfortable with it.

Contrast Dr. Barry with Mary. Mary and her husband were excellent savers. When Mary reached age 55, her company offered an early retirement package. We ran through the numbers and decided that, from a financial perspective, they would be fine. Mary was excited. A year later, she came in for a review and told me she was busier than ever. She had always been actively involved in her church and she was having a wonderful time volunteering and contributing in ways she never had the time for before.
Traditional retirement worked well for Mary. She had activities lined up that she found fulfilling, things she and her husband had planned for years

Next, let’s take a look at Ed. Ed sidled up to me at a social event. He wasn’t my client, but we’d known each other for years, and he knew what I did for a living. He looked around to make sure no one was listening. And said, “Dana, I’ve got to tell you. I’m having trouble with this.” I instantly knew what he was talking about. I’d heard he had sold his business and retired a few months prior.

I replied, “Yes, a lot of people do. Particularly career-oriented people such as professionals and business owners.”

He continued, “It’s only been a few months, and I’m thinking, is this it? I’ve got to find something to do.”
We talked for a while. Ed had run a successful business for years. He had carefully planned his exit strategy. He had been busy in his first few months of retirement, but it wasn’t the right kind of busy. It wasn’t satisfying.

Ed was used to leading a team, making decisions, and working toward goals. To be happy in retirement, he needed to find a way to continue to use these skills.

Retirement is a big life transition. It’s not for everybody. It may not be for you.

You will need to figure out what type of retirement will work for you. Like Dr. Barry, do you want to find a way to schedule a gradual transition? If you’re like, Mary can you figure out a way to stay involved with an interest of yours so that you can continue to contribute?

If you’re married, what does your spouse want? What will you do with your time in retirement? Do you have activities you are excited about pursuing? These are important questions to answer.

The last thing I want to talk about in this podcast is how working in retirement can impact your finances.

Overall more income makes your plan look better. But keep in mind, more income also impacts your taxes. Some people take up part-time work in retirement and are surprised by how that impacted the amount of taxes they pay on their Social Security for example. Or, if you began Social Security early, and you are not yet full retirement age, your earnings will be subject to the Social Security earnings limit. Go back and listen to the Chapter 3 podcast if you need to brush up on this topic. In general, as long as you plan ahead, you’ll be fine.

And, if you’re taking up self-employment for the first time, make sure you understand how taxes on self-employment income work. You’ll be paying both the employer and employee share of FICA taxes on any net income. Net income amount you make after all eligible business expenses. Most self-employed people need set aside funds each month and make quarterly estimated tax payments.

In conclusion, we’ve covered both the “mercenary approach” and the “thrive approach” to how you use your human capital. We also covered several different types of retirement stories so you can begin to think of what type of retirement might work for you. And the last thing we touched on was the need to plan for taxes if you work part-time in retirement. Remember, your human capital is one of your biggest assets. Use it wisely.


Thank you for taking the time to listen today. Visit to get a copy Control Your Retirement Destiny in either electronic or hard copy format.

You can also visit, to see how a staff of experienced retirement planners can help.


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