If you’re thinking of postponing retirement, you’re not alone. In a recent study by the Federal Reserve, more than a quarter of Americans said they plan to keep working as long as possible. Meanwhile, data from the U.S. Bureau of Labor Statistics confirms that nearly 20% of workers 65 and over continue to hold down jobs. While delaying retirement may not be ideal, there are some good reasons to consider staying in the workforce longer than you originally planned.
1. You’re behind on savings
According to the Economic Policy Institute, the average household aged 56-61 has $163,577 in savings. But an alarming 41% of 56- to 61-year-olds have no retirement savings at all. Even if your nest egg is hovering around that average, you’re looking at just $8,178 a year, or $681 a month, of income over a 20-year retirement. When you factor in Social Security — which, for the current average recipient, is just $1,360 a month — that’s still just over $2,000 a month to cover your living expenses in their entirety. Working a few extra years will give you an opportunity to catch up on savings. Anyone aged 50 or older can contribute up to $6,500 a year to an IRA and $24,000 to a 401(k). Maxing out either option could significantly boost your retirement savings — especially if you’re starting out with nothing at all.
2. You have a good job — with good benefits
Many seniors wait until age 65 to retire because that’s when they first become eligible for Medicare. But while the program provides critical health benefits, it’s by no means free. In fact, between copayments, deductibles, premiums, and other services not covered by Medicare, some couples might spend as much as $350,000 once they’re enrolled, according to the Employee Benefit Research Institute. On the other hand, if your employer provides a private health plan with better coverage, and you have the option to continue working past your mid-60s, it might pay to stay at your job for the medical benefits alone.
3. You want more out of Social Security
Your Social Security payments are based on your income during the 35 highest-earning years of your career. However, the age at which you file for benefits affects the amount of those benefits as well. Once you reach your full retirement age, you’ll be eligible to claim your benefits in full. But if you…