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4 Reasons Not to Retire Before 66

By Maurie Backman - Nov 9, 2017 at 9:18AM

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Sometimes, retiring prior to age 66 is a good idea. Here are four scenarios where it clearly isn't.

Countless workers dream of retiring early and enjoying a few extra years of leisure. But while early retirement can work out well for some people, it can also backfire under certain circumstances. Here are a few reasons to rethink the idea of ending your career before age 66.

1. You're short on savings

If you've done a great job of saving money and have a large enough nest egg to support an early retirement, then by all means, go for it. But most older workers aren't ahead of the game. If anything, they're behind on savings, and if you're one of them, retiring before age 66 can be a bad idea.

Smiling senior man seated at a kitchen table, hands folded under his chin, with food and dishes on the table in front of him.


The average baby boomer aged 56 to 61 has $163,577 saved for retirement, according to data from the Economic Policy Institute. But if we look at the median savings balance among that age group, we see it's just $17,000. And since we're looking at a median that's well below the average, it means most older workers have less than $163,577.

If you're behind on savings by the time you reach your early 60s, then it pays to keep plugging away for as many more years as you can. This way, you'll get an opportunity to boost your nest egg and ensure that you have enough income once you do retire.

2. You have a family history of good health

Americans are living longer these days, with one in four expected to make it past age 90. Now without a crystal ball, it's impossible to predict how long you'll live, but if your parents and grandparents all lived well into their 90s, and your health is great, it stands to reason that you have a pretty good chance of doing the same. It also means that if you leave the workforce before age 66, you could end up with a retirement that's 30 years or longer -- and with that comes the risk of running out of money down the line, On the other hand, if you decide to work until age 66 or later, you'll shorten your retirement, thus allowing whatever money you have socked away to go further.

3. You want more out of Social Security

Though it's never a good idea to count on Social Security to the point where you don't save on your own for retirement, it's also smart to get the most out of your benefits. But if you retire before age 66 and claim Social Security upon leaving your job, you'll actually end up slashing those benefits.

Though the amount you collect each month from Social Security is based on your personal earnings record (specifically, your 35 highest years of earnings), the age at which you first start taking benefits can cause those payments to go up, go down, or stay the same. Now if you were born between 1943 and 1954, your full retirement age for Social Security purposes is 66, which means that's the point at which you can collect your benefits without facing a reduction. But if you file at any point prior to 66 (keeping in mind that you can start taking benefits as early as 62), you'll collect less in Social Security each month -- for life.

Going back to the first point, if you don't have much in the way of savings and need that Social Security income to stay afloat in retirement, then filing for benefits early could end up hurting you. You're better off waiting until full retirement age to file -- or better yet, holding off until age 70 and collecting the maximum boost you're entitled to.

4. You love your job

Many workers rush to retire because their jobs stress them out and make them miserable. But if you're fortunate enough to enjoy what you do, then it pays to keep doing it well into your late 60s and beyond.

Though retirement can be a rewarding period of life, you should know that retirees are 40% more likely to suffer from depression than workers, and a big reason has to do with the difficulty many seniors have coping with a lack of daily structure. If you retire at an age when you're still young enough to go to work on a regular basis, you might end up with too much downtime on your hands, which, in turn, could affect your mood and outlook.

Though there are plenty of good reasons to retire as early as possible, if your savings are lacking, your health is great, you're counting on Social Security, or you're happy at work, then it pays to wait until age 66 or later to make that transition. With any luck, you'll still have a number of good years to look forward to from that point on.

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