According to a recent survey, approximately 40% of workers intend to postpone retirement until later in life due to inflation.
If you’ve been planning your retirement since you started your career, you may have a preconceived notion of what it will be like. However, there’s a chance that, for reasons that may be beyond your control, you won’t begin retirement when you had anticipated.
According to a recent Nationwide Retirement Institute survey, approximately 40% of workers plan to delay retirement due to inflation. Although plans don’t always work out, prospective retirees can postpone their retirement to make the most of a challenging circumstance. Therefore, if you’re on the fence, consider delaying retirement for the following reasons.
You allow yourself enough time to save and invest.
The magic retirement savings number for many retirees is $1 million, but most Americans are far from reaching that amount. According to Vanguard’s “How America Saves 2022” report, workers in Vanguard’s retirement plans aged 45 to 54 earned a median of $61,530 at the end of 2021. Those aged 55 to 64 had a median plan balance of $89,716.
Retiring later allows you to live off your savings for a longer period of time while still having time to save for your golden years. The longer you save, the less dependent you’ll be on your savings when it’s time to stop working, as many retirees worry they’ll run out of money before they pass away.
You can postpone Social Security in order to receive a larger payout.
Although you can apply for Social Security as early as age 62, the longer you wait, the more you might eventually be able to claim. Your benefits may be significantly increased if you hold off until you reach 70 years of age or your full retirement age. For instance, if a person waits until age 70 instead of retiring at age 67, their monthly benefit will increase by 24%.
Delaying Social Security means you’ll have to make up for lost income. You might have to put off retiring longer than you had planned if you don’t have a strong nest egg in place. Working may be your sole or primary source of income for the foreseeable future. But while you’re at it, you’ll lock in some additional Social Security COLA increases.
You enjoy what you do.
If you like your job and enjoy working, you don’t have to stop when you reach a certain number. Many people anticipate the day when they will no longer have to commute to work because they do not all enjoy their jobs. But if you’re happy, don’t feel obligated to stop.
Working has numerous benefits for emotional, psychological, and mental health aside from financial gain. If older worker enjoys their job, they don’t necessarily need to retire at a certain age.
You can take advantage of additional job benefits.
While income is important, most jobs also provide other benefits. For example, you could have a fantastic employer-matched 401(k) program. You can also rely on medical benefits if you aren’t yet eligible for Medicare. These benefits may be superior to those provided on the Affordable Care Act’s healthcare exchanges, or at the very least, they may cost significantly less.
Other benefits that some employees might get include gym memberships, bill reimbursement, payment for some expenses, and more. It may be in your best interest to stay on a little while longer if you want to keep some benefits that you would lose if you quit your job.
You can put up with inflation.
Pre-retirees are particularly harmed by rising costs because inflation is at multi-decade highs. Again, with about 40% of respondents delaying retirement due to inflation, according to a recent Nationwide Retirement Institute survey, it may make sense to wait out price increases and make sure your finances are stable before moving on to the next stage.
You’re trapped and unable to retire.
For a variety of reasons, your initial retirement plan may not have gone as planned. For example, you may be unable to downsize due to an unstable housing market. A job that wasn’t your usual line of work had to be found because you were laid off during the pandemic, or else you had to make up for lost income by working now.
Perhaps you needed to move closer to family or unexpected health issues have taken a bigger financial toll than you anticipated. Whatever the cause, it’s possible that you won’t be able to retire right away and will instead need to reconsider your options, which may include continuing to work.
Retirement is not a one-size-fits-all proposition. Don’t worry if something unexpected forces you to postpone retirement or if things don’t go as planned. There may be more options available to you than you realize if you feel stuck and can’t see a way out. Spend some time now analyzing your options to create a future retirement plan. And if you want to stay on track and avoid this circumstance in the future, here is how much you ought to have saved at each age.
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