Today, Americans are living longer than ever. This is great news, but it can also create challenges when it comes to retirement planning. A longer retirement means more time for hobbies, family and friends. It also could mean you'll need more income to maintain your lifestyle and prepare for potential health care costs.
When estimating how much to save for retirement, most people base the number on when they want to retire. The average retirement age is 61, but 41% of workers plan to keep working past age 65. Plus, many retirees choose to return to the workforce, proving that age is just a number!
As it turns out, there are plenty of good reasons to delay retirement for a few years. Here are a few examples:
#1: You need to close a retirement income gap
As you grow closer to retirement, you may discover that your income won't be enough to meet your needs. One way to fill a projected income gap is to delay your retirement and stay in the workforce longer than you originally planned. Every year you continue working is one less year you have to rely on your retirement savings, and one more year to save!
With time on your side, you can continue setting aside funds for the future in your IRA or employer-sponsored retirement plan. Plus, once you're 50 or older, you're eligible to contribute more each year to both your 401(k) and IRA. Depending on the plan you have, you may be required to start taking minimum distributions once you reach age 70 ½ to avoid penalties.
#2: You want to maximize retirement benefits
Many people decide to postpone retirement for a few years to get the most from certain retirement benefits. For example, waiting to claim Social Security retirement benefits past your full retirement age could boost your benefits significantly. For every month you delay, Social Security increases your benefits by a certain percentage until you reach age 70.
Another reason to keep working is to take advantage of health insurance plans and other benefits through your employer, such as group disability insurance coverage. Staying on an employer-sponsored health insurance plan may give you more desirable coverage at a lower cost.
#3: You enjoy working
Even if you don't need to delay retirement for financial reasons, you might decide to keep working because you love what you do for a living! After all, working is a great way to stay active and involved in your community. Maybe you want to stay in your current role. Or, maybe you want to transition to part-time or start a second career and pursue a lifelong passion. No matter the reason, a desire to work can be a rewarding reason to delay retirement.
Enjoy retirement on your terms
At Wright-Patt Credit Union (WPCU), we want to help you realize your dreams of a happy retirement, whatever that may look like to you!
No matter where you are on your retirement planning journey, financial advisors on WPCU's Retirement Solutions Team* can meet with you to uncover your needs and long-term goals and help you build a financial plan for your future.
Contact us today to learn more about our retirement planning options and schedule a complimentary, no-obligation appointment.
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