If you’ve been dreaming of retirement ever since you entered the workforce, you probably have an idea of what it might look like when you’re no longer working. But there’s a chance you won’t start retirement when you think you will, perhaps because of circumstances beyond your control.
About 40 percent of workers plan to push back retirement later in life because of inflation, says a recent survey by the National Retirement Institute. While life does not 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 sooner than you think.
1. You give yourself more time to save and invest
For many retirees, $1 million is the magic retirement savings number, but Americans are nowhere near that number, by and large. According to Vanguard’s “How America Saves 2022” report, workers between the ages of 45 and 54 in Vanguard retirement plans had an average of $61,530 at the end of 2021. Those aged 55-64 had an average of $89,716 in their plans.
Delaying retirement gives you more time to save for your golden years and less time to live off your savings. Many retirees fear they’ll run out of money before they die, so the more time you spend saving, the more you’ll depend on those savings when it’s time to stop working.
2. You can delay Social Security for a large payout
While you can admit Social Security at the age of 62, the later you are suspended, The more you can finally admit. Waiting until your full retirement age or all the way to age 70 can bump your benefits significantly. For example, someone with a full retirement age of 67 could increase their monthly benefit by 24 percent if they waited until age 70.
Deferring Social Security means you have to make up for potentially lost income. Without a solid nest egg in place, you may have to wait longer for retirement than you anticipated. Continuing to work may be the only, or main, source of income for a while. In the meantime, you’ll be locked back in COLA Social Security boosts while you are there.
3. You like what it contains
If you are happy with your job and otherwise happy with work, you should not stop once you hit the magic number. Not everyone enjoys their job, and many look forward to the day they never have to go to the office again. But if you are satisfied, don’t feel forced to stop.
Apart from income, work has many other benefits for emotional, psychological and mental health. Older workers don’t have to stop working at a certain age, especially if they like it.
4. You can capitalize on the benefits of other work
While the income is useful, the job typically provides other benefits as well. For example, you can have a good one 401(k) employer-matching program. If you don’t qualify for Medicare, you can still count on health care benefits. These benefits may be better than what is offered in the ACA Medicare exchanges, or at least for much less than you would pay.
Some workers may receive other benefits, such as reimbursement for continuing education, gym memberships, reimbursement for some bills and more. If you want to keep some of the benefits you wouldn’t get if you quit your job, you might want to keep a little longer.
5. You can wait out inflation
and inflation at multi-decade highs, Rising costs are hurting everyone, including pre-retirees. Again, with some 40 percent of respondents pushing back their retirement due to inflation, according to the latest survey nationwide Retirement Institute, it can make sense to wait out rising prices and make sure that your finances are on a stable footing before you move to the next stage.
While you wait, use it Bankrate’s retirement calculator to figure out how long your money will last.
6. You are stuck and can’t retire
For many reasons, your original retirement plan may not work out the way you thought it would. For example, you may not be able to downsize because of the uncertain housing market. Or you were laid off during the pandemic and had to look for another job like you did for a job, so you’re making up for lost income now and you have to keep working.
Maybe you want to move to be closer to family, or a health problem suddenly eats up more of your budget than you thought. Regardless of the reason, you may not be able to retire now and may need to reevaluate your plans or consider alternatives, including working longer hours.
Retirement is not a one-size-fits-all path. If you have to delay retirement due to unforeseen circumstances or things not going according to plan, don’t worry. If you feel stuck and can’t see a way out, you may have more options than you think. Take some time to review your options now so you can map out your future retirement. And if you want to avoid this situation in the future, here it is how much you should save at each age to stay on track.