Five reasons to postpone retirement
October 22, 2014 by New York Life
Are you considering postponing your retirement? Well, you’re not alone.
According to the Employment Benefits Research Institute, in 2011 36 percent of workers expected to retire after age 65, compared to only 25 percent of workers in 2006. Gallup likewise finds that people are retiring on average four years later than they were in the 1990s.
There’s a variety of reasons why Americans are delaying retirement. Some are financially related, such as not having enough savings or too much debt or ongoing obligations; while others simply aren’t ready to stop working.
What a lot of people forget to consider is that there are many benefits to postponing retirement. Here are a few to consider as you plan your future.
- A shorter retirement. You’re likely to live longer than once anticipated, so if you work longer, you might be financing a shorter retirement. A 65-year-old man has a 50% chance of living past the age of 85. And, for a 65-year-old couple, there is a 50% chance that one member will live beyond the age of 92!
- Your health. Working can actually be good for your health. A recent study by the Institute of Economic Affairs found that retirement causes a major decline in physical and mental health, increasing the likelihood of suffering from clinical depression and decreasing the likelihood of being in “very good” or “excellent” health.
- Your savings will have more time to grow. Your later years of your working life are typically some of your most profitable because you are at the top of your career and with the kids (hopefully) on their own, you can sock away more money for your retirement. Not to mention that the government allows you to make catch-up contributions to your 401(k).
- Your Social Security benefits will increase. You’ve probably heard this one before—there are great Social Security benefits to working a few years more. For each year you delay taking Social Security, up until the age of 70, benefits rise substantially.
- Not paying for your own health insurance. Your company can pay for a majority of your health insurance. By staying at your job longer you can take advantage of your employee benefits, such as health insurance. Whether retired or not, as we age, typically we have more healthcare costs which lead to more out-of-pocket expenses. According to a 2010 Towers Watson retirement attitudes survey 68 percent of older workers cite health coverage as a reason to delay retirement.
So if you are thinking of postponing your retirement, know you aren’t alone and think about the benefits it may hold for you.