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5 Reasons Not to Retire Before 66

By Selena Maranjian - Jul 2, 2017 at 8:24AM

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Retiring early can be wonderful, but it's not the best idea for some people. See whether any of these reasons to not retire before 66 apply to you.

"With the duckets that I now have safe, I think I will retire at 66 years of age, praise God, in good health."
-- Winslow Homer 

Famous American landscape painter Winslow Homer planned to retire at age 66 because he felt he had accumulated sufficient funds for retirement. That's actually a bit later than the average American retires. Our average retirement age was recently 63. If you're thinking of retiring in your early 60s, think your situation through carefully, because there are lots of reasons not to retire before age 66.

Two signposts at intersection - one says now and one says later

Image source: Getty Images.

Here are some of those reasons.

Reason No. 1: To keep boredom at bay

Many of us are eagerly looking forward to retiring and not having so much to do. It might, therefore, surprise you to learn that many retirees find themselves bored. A 2014 MassMutual survey found that 10% of retirees found themselves lonely, bored, with a lost sense of purpose, and/or depressed in retirement. (Boredom isn't the norm, though: Fully 72% of respondents reported feeling quite happy or extremely happy in retirement.)

If you're the kind of person who enjoys the routine of getting up and going to work each day and you enjoy your job, as well, you might do well to just keep working for more years.

Reason No. 2: To play it safe

Another reason to not retire too early is if you're risk-averse. By delaying retirement you can also reduce risk -- such as the risk of running out of money late in life, the risk of getting hit with an unexpected financial curveball when you don't have your current income to help you deal with it, and so on. The more you're able to save for retirement, the better you'll be able to deal with any unexpected financial needs that life throws your way, such as a costly health crisis or a sudden need to help out your child.

two fingers with sad faces drawn on them, in front of blurry dollar bills

Image source: Getty Images.

Reason No. 3: Because you can't afford to retire before age 66

For many people, the decision to work at least until age 66 is perfectly clear: They simply can't afford to retire earlier. After all, if you retire at age 62 and live to age 95, an age that plenty of people will reach, you're looking at a retirement that's 33 years long. You'll probably need a lot of money socked away for that.

According to the 2017 Retirement Confidence Survey, about 24% of workers said they had less than $1,000 saved for retirement, and a whopping 55% had less than $50,000. Only 20% had socked away $250,000 or more. That suggests that millions are not likely to have enough to retire on at 66 -- or even when they're older. Consider, for example, the well known "4% rule," which suggests that you might withdraw about 4% of your nest egg annually in retirement (adjusting for inflation over time). With a nest egg of even $400,000, that would give you just $16,000 for the year. If you're counting on Social Security making up the difference in your retirement income needs, know that the average Social Security income is about $16,000 a year, too.

Green arrow rising, on top of growing stacks of cash

Image source: Getty Images.

Reason No. 4: A bigger nest egg

So clearly, many people would do well to not retire before age 66 and instead keep working, to build up a bigger nest egg. The good news is that working for a few more years can do wonders for your financial health. Imagine, for example, that you have $400,000 in your retirement account at 64. If you work three more years and retire at 67 and your nest egg grows by an annual average of 8%, it will turn into more than $500,000. That's a big difference -- enough to generate an additional income of about $4,000 if you follow the 4% rule.

Working a few more years actually offers several advantages: Yes, you'll be able to save and invest a lot more money, resulting in a bigger nest egg. But you'll also be delaying when you start drawing down your nest egg, too. Thus, it will have to sustain you for fewer years and it will last longer. In addition, if you're enjoying employer-sponsored health insurance, you can keep doing so for a few more years, helping you save money on the healthcare expense front, as well.

If you're somewhat close to retiring, the table below will show you how much more you might amass over several relatively brief time periods if your money grows by an annual average of 8%:

Growing at 8% For:

$10,000 Invested Annually

$15,000 Invested Annually

$20,000 Invested Annually

3 years




5 years




10 years




12 years




15 years




Data source: Calculations by author.

Postit note that says Retire in 10 years - with 5 years crossed out

Image source: Getty Images.

Reason No. 5: Bigger Social Security checks

A final consideration is Social Security. By delaying retirement, you can also delay starting to collect Social Security. For every year between your full retirement age and 70 that you delay, your payout will grow about 8% larger -- up to a total of 32% larger if you delay from age 66 to 70. That can turn an expected monthly check for $2,000 into one for $2,640, a meaningful difference.

That bigger check can make delaying retirement seem like a no-brainer move, but things are not quite what they seem. Yes, your checks will be bigger, but remember that by delaying starting to collect them, you're ending up with many fewer checks. The system is actually designed so that if you live an average-length life, it won't really matter whether you start collecting at 62 (the earliest age at which you can do so) or 70 (the latest age to start collecting). It will be a wash.

Of course, perhaps you're in excellent health and perhaps your family tree is full of people who lived into their 90s. If so, aiming for bigger Social Security checks can be smart and will net you more from the Social Security program over the long run. (There are other strategies you can employ to increase your Social Security benefits, too.)

The reasons we've covered here can make delaying your retirement appealing, but it's not necessarily your best move. If you can afford to retire early and you want to, go ahead and consider doing so!

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