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When to Retire? 5 Reasons to Delay Retirement

When to Retire? 5 Reasons to Delay Retirement

Kathleen Coxwell

September 2, 2014 • 3 minutes

“Freedom 55” was the rallying cry for decades of people working toward an early retirement… However, over the past few years, the U.S. labor market has seen a continual increase in the number of working individuals older than 55 who are delaying retirement.
Why is this change happening? What factors are influencing why retire-aged people choose to continue to stay in the labor force?

Obviously, significant factors are influencing why people are choosing to retire later in life. 
When to retireWhat factors are influencing today’s delayed retirement trends?
1. Retiring Later Means You Actually Need Less Retirement Savings
Baby boomers at 65 and  in relatively good health can realistically expect to tack on another 20 to 30 years to their lifespan, which means their retirement funds need to be quite hefty to support themselves throughout their golden years. By postponing retirement, there will be fewer years without a regular income from work that will have to be financed somehow. Simply working part-time can be enough to slow down the withdrawals from your retirement savings.

2. More Time to Save
The years just before retiring can be some of the most ideal years to save for retirement. It’s a lot easier to save money during these years compared to when you were younger. Once the children are grown and on their own, and the mortgage is paid off, saving can be done a lot faster. Not only that, workers over the age of 55 can delay paying taxes on an extra $1,000 in an IRA and an extra $5,500 in a 401K, in comparison to younger workers. 

3. Availability of Continued Health Benefits
Medicare is not available to retirees until they reach 65 years. Until then, it can be a challenge to find affordable health insurance coverage that’s comparable to what is being received through an employer. Holding onto your job for longer can be a cost-effective way of taking advantage of health benefits before turning 65.
When to retireThere are obvious financial advantages to pushing retirement out.
4. Delay Tax Burdens
It’s usually necessary to withdraw from traditional 401K accounts after the age of 70.5. Yet if you continue to work and do not own 5 percent or more of the company that sponsors the retirement plan, you can essentially postpone paying any income taxes on your retirement savings plan in a 401K. 

5. Bigger Social Security Checks
For every year that you put off signing up for Social Security between ages 62 and 70, these payments will continue to increase. For instance, a worker born in 1944 who currently earns $50,000 annually can expect to get approximately $1,927 per month in Social Security checks, compared to $1,826 for someone retiring at 55. The Trends and How to Make a Decision About When to Retire…
Over recent years, retirement in the U.S. is being delayed but not entirely deserted. Obviously finances have a lot to do with why many people continue to work well past 55 years, but even just working part-time doing something totally different from their career jobs can be an easy way to bridge the gap to full retirement. Money is the most important factor, but also consider the many different benefits of working. Use the Boldin Retirement Calculator to calculate a good date for when you could or should retire.

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