You've worked hard all of your life and are starting to dread your daily commute and job-related pressures. Throw in the fact that you don't have the energy level you did when you were younger, and retirement might seem like a welcome prospect. But even if you feel you're ready for retirement, there are certain scenarios where it actually pays to hold off and work longer. Here are a few such instances.

1. You're behind on savings

Because Social Security alone won't be enough to sustain you in retirement, you'll need to go in with a healthy amount of savings. So if your nest egg isn't up to snuff, the best way to increase it is to extend your career and bank as much additional money as you can. Currently, workers 50 and over can contribute up to $24,500 per year to a 401(k) and $6,500 to an IRA. If you max out the former for three additional years, you'll boost your nest egg by $76,000, even with modest investment growth during that time.

Older man at a laptop


If you're not sure how well your nest egg will hold up in retirement, your best bet is to see what withdrawing 4% annually will look like, as that's long been the standard to help ensure that you don't deplete your savings prematurely. Imagine you're itching to retire and have $300,000 socked away. At 4% a year, that's just $1,000 a month of income to work with, which isn't a whole lot. Therefore, if you're able to work a bit longer, you'll not only get a chance to pad your nest egg, but also avoid dipping into your savings earlier than necessary.

2. You took time off from work earlier in life

Social Security calculates your benefits based on your top 35 years of earnings on record. So if you don't have a 35-year work history -- say, you took time off to travel, raise kids, or care for a family member -- your benefits won't be as substantial. That's why it pays to extend your career if your benefits could use a boost. Replacing even a couple of years of zero earnings with an actual salary could increase what may come to be your single largest monthly income stream.

3. Your employer offers a fantastic group health plan

Millions of seniors depend on Medicare to cover their health-related needs, and once you turn 65, you're eligible to sign up. In fact, your initial Medicare enrollment window begins three months before the month you turn 65 and ends three months after the month of your 65th birthday, and if you don't sign up during that seven-month period, you'll face a 10% Part B premium hike for every 12 months you go without coverage. There's an exception, however, for those who are still employed at 65 and are covered under a group plan at work.

In fact, having that group health insurance is a good reason to consider extending your career. If your employer subsidizes all or most of your plan, you may come to find that it's cheaper than your out-of-pocket costs under Medicare. This especially holds true if your employer gives you dental and vision coverage, since those are two services Medicare doesn't provide. Since healthcare could easily end up being your single greatest expense in retirement, it pays to keep your costs down for as long as possible, even if that means staying on the job another year or two.

4. You're still figuring out your retirement plan

There's a reason retirees are 40% more likely to fall victim to depression than workers: Having too much free time can make for a restless, unfulfilling existence. If you're eager to retire but have no clue as to how you'll fill your days, then it pays to keep working until you're able to figure out what to do with yourself. Maybe you'll start a business or volunteer for a local organization. Or maybe you'll develop some new hobbies to fill your days. It doesn't really matter what you do with your time as long as you go in with a plan, so if you're still figuring things out, you might as well keep working in the interim.

It's natural to want to retire as early as possible, especially if you're no longer satisfied with your job. But consider the upside of working longer before you close out your career. You may find that a year or two more in the workforce spells the difference between financial flexibility in retirement and a cash-strapped existence later in life.