Work Longer, Retire Better

Years ago, I wrote an article that warned people not to place too much faith in their ability to work longer to fund retirement. The risk was abundantly clear: Just because you want to keep toiling, does not mean that you will be able to do so. For some, there will be physical limitations and for others there may not be a job. That’s why nudges like me encourage you to save diligently during your working years.

Of course, if you are sandwiched between the obligations of kids and aging parents or find yourself in your 50s without enough banked, you have two other options: Spend less in retirement or delay

Hand putting Coins in glass jar with retro alarm clock for time to money saving for retirement concept

the age of retirement. The latter is the focus of this column, because working longer can have a significant impact on your retirement years. That’s because a delay allows you to continue contributing to your 401(k) or IRA; it allows your savings and investments a longer time to grow; you avoid early withdrawals from your nest egg; and you can wait to file for Social Security retirement benefits, which results in a larger monthly check for the rest of your life.

A paper by the National Bureau of Economic Research confirms this common-sense notion. Retiring at age 66 instead of 62, for instance, can increase a retirement standard of living by almost 33 percent. Hang in there until age 70 and your standard of living will improve by nearly 75 percent. The authors of the paper note: “The results are unequivocal. Primary earners of ages 62 to 69 can substantially increase their retirement standard of living by working longer. The longer work can be sustained, the higher the retirement standard of living.” Even working a few more months can increase retirement income by 2 percent!

Steve Vernon, a consulting research scholar at the Stanford Center on Longevity, notes that for middle-income workers (defined as those with less than $1 million in retirement savings), one of the most important decisions to make is “when to leave the paid workforce and whether to work part time for a period until full retirement.”

Jill Schlesinger, CFP, is a former options trader and CIO of an investment advisory firm who covers the economy, markets, investing and anything else with a dollar sign on TV, radio and her blog, “Jill on Money,”


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