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What Do These People Know about Retirement that You Don’t?

“In fact, 18% of both baby boomers and Gen Xers expect to work past age 74, according to Northwestern Mutual's 2019 Planning & Progress Study.”

Train track

If you’re convinced that you’re going to stop working as soon as you possibly can, it may be worthwhile to consider a few good reasons to continue going to work. Consider these reasons:

Keep your retirement savings growing. The more money you accumulate in your retirement accounts, the more financial security you’ll have in your later years. However, a large percentage of middle-aged and older workers are woefully behind. How many? Try 17% of all boomers who have less than $5,000 saved for retirement, according to the study referenced above. Retire too early, and you’ll have far fewer options. Working longer will give you more time to save more.

Let your Social Security benefits reach their maximum potential. Another aspect of a smaller retirement nest egg is an increased dependency on Social Security benefits, which were never designed to replace 100% of worker’s incomes. One way to maximize your benefits, is to wait to take your benefits as long as possible, up to age 70. Doing so could allow you to accrue delayed retirement credits that increase benefits by 8% a year.

Say your Social Security benefit at age 67 is $1,500. If you keep working until 70, that monthly benefit will grow to $1,860. If you are the higher earner, your surviving spouse will receive higher benefits.

Stay socially connected and avoid boredom. Did you know that retirees are more likely—by 40%—to be diagnosed with depression? Most of that is a direct result of being bored. Older Americans who don’t work, often struggle to adjust to their new lifestyle. If you don’t have a lot of free cash to spend on travel and activities, you may find yourself bored, restless and isolated.

If your job also serves as a social outlet, you may be better off mentally and financially to extend your working years.

People don’t like the idea of a shorter period of retirement, especially when their family and friends are starting to retire. However, remember that people are living longer these days, and one out of every three people who are 65 right now are expected to live past age 90, while roughly one in seven will live past age 95.

You don’t have to miss out on retirement just because you work a few more years. If your finances and your mental health will benefit from sticking around on the job, it’ll be well worth the effort.

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