THE VALUE OF WORKING LONGER

Research has shown that delaying retirement and working longer, at least part-time, has many benefits for health and well-being. But the financial benefits are also great. While soon-to-be retirees are often counting the days until walking away from a job, the following facts should be considered when determining when to retire:

  1. Every year you forego taking Social Security from age 62 to age 70 boosts your eventual benefit by a substantial percentage. Your age 70 retirement benefit is 75% greater than your benefit at age 62. While a retiree is eligible to apply for benefits at age 62, the benefit received will be at its lowest value. Postponing the receipt of Social Security until age 70 means that your benefit will be significantly greater.
  2. If you delay for five years, your Social Security benefit will increase by 40 percent.
  3. Working until age 67, keeping a diversified portfolio, delaying Social Security, and continuing to save 15 percent of pre-tax income can accumulate 44 percent more retirement income than someone retiring at 62.
  4. Working to age 70 could boost retirement income by almost 80 percent.

While it may be tempting to retire at your first opportunity, evaluating your opportunity for a more robust retirement is important. Consider a retirement transition program that allows you to gradually exit the workforce over a period of time, which will delay using your savings, give you the opportunity to transition expenses, and allow your savings accumulation to continue. If a transition program isn’t available, consider part-time employment that will cover most of your expenses each month, delaying your need to use your Social Security benefits. In the long run, working a little longer and waiting to collect Social Security may be the difference in an average retirement and what you’ve been dreaming of.