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Personal Finance: How Delaying Retirement Might Be Best for You

by fat vox

Younger people view statements about delaying retirement as a form of blaspheme. Older people are a bit more realistic about the idea. The benefits of delaying retirement are enough to cause people to not only accept it, but embrace it. A walk through a list of good reasons to delay retirement may cause the idea to resonate with you.

Retirement options may be expanded when you retire later.

You cannot count on sustaining good health or avoiding an accident before delaying retirement. The odds are generally in your favor not to experience a major negative change right at retirement time. A delay of one to five years should not adversely affect most retirement plans. The additional time to save and plan can have an enormous impact on your lifestyle after you retire.

You can clean up any snags in your personal finances.

Most people look for ways to adjust their personal finances to make retirement easier. Buying a new car before your income drops in retirement is on this list. Pay off all credit card debt. Retire the mortgage before your retire. You may want to get a more practical house now that your child rearing days are over. By retiring a little later, you have more time to make these decisions and complete them.

The monthly benefit of many pensions including Social Security grows larger with each year of delaying retirement.

The difference between collecting Social Security at 65 and waiting until you are 70 is several hundred dollars per month in most cases. Some company pension plans work the same way. More money in your personal retirement accounts means more income and capital to draw on in retirement. If you have not reached your retirement goals by 65, keep working a little longer to get them in place if your circumstances will allow it.

You can accumulate items that you want to use in retirement.

If you have hobbies, you may want to crank them up to a more serious level after you retire. Delaying retirement will give more time to find and purchase these items while your earnings power is still high. This same thing is true if you are developing a small business to occupy you during retirement. A couple of years can make a huge difference in the viability of a small business. Going longer without having to be supported by its income can be a make or break issue for your success.

Some will choose to begin collecting Social Security along with working to boost income.

After your full retirement age, you can start collecting Social Security and work without being penalized by having to forfeit part of your benefits or taking a leave of absence from your job for the last part of the year to stay under the income maximum. If you company will let you keep working beyond your retirement age, you can have your cake and eat it, too, for a couple of years. This can seriously increase the size of your savings account or reduce your debt, if needed.

Medicare benefits may reduce your health insurance costs during your last few working years.

At age 65, you qualify for Medicare benefits. For many people, the cost of a Medicare supplement plan and Medicare Part D insurance will be a reduction in the cost of health care. This savings translates directly to your personal bottom line. Not only can you collect Social Security and wages during this extension in your career, but you will save money on the cost of your health care. For most, this is still inside the window where your personal health is still good. The savings overall can be substantial.

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