If you’ve been dreaming of retirement since you entered the workforce, you might have a certain idea of what it looks like when you’re no longer working. But there’s a chance you might not start retirement when you thought you would, perhaps due to circumstances beyond your control.
About 40% of workers are planning to push retirement later in life due to inflation, says a recent survey by the Nationwide Retirement Institute. While life doesn’t always go according to plan, would-be retirees can make the best of a bad situation by delaying retirement. So if you’re on the fence, here’s why you might want to consider retiring later than you originally thought.
1. You give yourself more time to save and invest
For many retirees, $1 million is the magic savings number for retirement, but Americans are nowhere close to that figure, by and large. According to Vanguard’s “How America Saves 2022” report, workers who were between 45 to 54 years old in Vanguard’s retirement plans had a median of $61,530 at the end of 2021. Those aged 55-64 had a median $89,716 in their plan.
Delaying retirement gives you more time to save for your golden years and less time to live off your savings. Many retirees fear they will run out of money before they die, so the more time you spend saving, the less you’ll depend on that savings when the time comes to stop working.
2. You can delay Social Security for a bigger payout
While you can claim Social Security as early as 62 years of age, the later you put it off, the more you could eventually claim. Waiting until your full retirement age or all the way until you hit 70 years of age could significantly bump up your benefits. For example, those with a full retirement age of 67 could boost their monthly benefit by 24% if they waited until age 70.
Delaying Social Security means you’ll need to make up for that potentially lost income. Without a solid nest egg in place, you may have to delay retirement longer than you anticipated. Continuing to work might be your only, or main, source of income for a little while longer. In the meantime, though, you’ll lock in some more Social Security COLA boosts while you’re at it.
3. You like what you do
If you’re happy with your job and otherwise happy with working, you don’t have to stop once you hit a magic number. Not everyone enjoys their jobs, and many look forward to the day they don’t have to go into the office anymore. But if you’re satisfied, don’t feel compelled to stop.