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More Than Half of Older Workers Are Postponing Retirement. Here Are 4 Great Reasons to Do the Same

By Maurie Backman - May 13, 2018 at 6:49AM

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Before you retire, think about the benefits of waiting -- because there are plenty of them.

Countless workers look forward to retirement and the chance to get a well-deserved break from the daily grind. But it seems like a growing number of workers aren't rushing into it the same way their predecessors did. An estimated 53% of workers aged 60 and over say they intend to postpone retirement, according to a new CareerBuilder survey.

If you're planning to retire in the near term, you may want to think twice before pulling the trigger. Here are a few good reasons to put off retirement and stay at your job a bit longer.

Smiling older man


1. You don't have enough savings

Though Social Security will help pay the bills in retirement, you still need your own savings to ensure that you're able to cover your expenses. But the majority of older Americans are sorely lacking in retirement funds. The median savings balance among older workers aged 56 to 61 is a mere $17,000, according to the Economic Policy Institute, which amounts to very little income over the course of what could easily be a 20-year retirement or longer.

If you're thinking of retiring but don't have a healthy savings balance, you're better off postponing it until your 401(k) or IRA starts looking a bit more robust. Though there's no single magic number to aim for, the more money you're able to amass, the better.

Let's say that, instead of retiring this year at age 65, you decide to hold off, work three more years, and max out your 401(k) during that time. Even with extremely conservative investment growth, you still will be looking at an extra $75,000 in your nest egg, which could very well come in handy during your golden years.

A good way to know whether your nest egg is adequate is to apply the 4% rule to your savings balance. The rule states that if you begin by withdrawing 4% of your savings balance during your first year of retirement and then adjust future withdrawals for inflation, your nest egg should last 30 years. Therefore, if you're looking at $200,000 in savings, 4% gives you roughly $8,000 of income to work with per year. Granted, that's in addition to your Social Security benefits, but the point is to be honest about whether your nest egg is truly enough.

2. You want to get more money out of Social Security

As stated above, Social Security most likely will serve as a key income stream for you during retirement. But staying in the workforce a bit longer could serve the very important purpose of boosting your benefits -- for life. For each year you hold off on filing for benefits past full retirement age, you'll increase your payments by 8% up until you turn 70.

Let's say your original plan was to file for benefits at your full retirement age of 67, at which point you'd be eligible for a monthly payment of $1,500. If you postpone retirement another three years and wait on those benefits, you'll increase them by 24%, for a total of $1,860 per month instead. And that additional income is bound to come in very handy during retirement, especially if your savings aren't all that impressive.

3. You don't have a plan for how you'll spend your days in retirement

There's a reason retirement increases the likelihood of suffering from clinical depression by 40%. Many seniors enter retirement without knowing what they'll do with their time. And when you go from working 40 hours or more per week to suddenly having no structure whatsoever, you can easily get thrown for a loop.

Therefore, if you don't have a plan for occupying yourself post-career, you're better off postponing retirement until you figure it out. Otherwise, you might end up regretting your decision to call it quits.

4. You want to keep your health in good shape

Some people have stressful jobs that end up harming their health. But if you love what you do and it serves as a social outlet, as well as an opportunity to stay physically active (say, in the course of your commute), then postponing retirement might help you preserve your health. In fact, studies have shown that working longer can lead to a longer life under the right circumstances, so if you're physically and mentally able to keep at it, you might as well.

Eager as you might be to kick off retirement, think about whether it's really the right move for you at this time. Working a few extra years might enable you to boost your savings, increase your Social Security benefits, map out a plan for your golden years, and maintain strong health. And those are all things you're bound to be thankful for later on.

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