The coronavirus crisis has had a profound impact on people of all generations. Not only may it be forcing Americans to alter their near-term plans, but it's also prompting some to change their long-term plans. In fact, 20% of adults aged 18 and over now plan to delay retirement because of the pandemic, according to Northwestern Mutual's 2020 Planning & Progress Study.
If you're nearing retirement age and are wondering whether it pays for you to put off that milestone as well, the answer is "maybe." But answering these four questions will help you land on the right choice.
1. Have my savings taken a hit this year?
Though the stock market tanked heavily back in March when news of the coronavirus outbreak hit, stock values have since recovered nicely. As such, it could be the case that your 401(k) or IRA balance isn't really in much worse shape than it was back in early 2020 -- and if so, you may, from a financial standpoint, be in a good position to retire when you want to. On the other hand, if your portfolio still needs to recover, postponing retirement could be a smarter bet.
2. Is my job stable?
Many people are forced to retire earlier than planned because of job loss. But if you have a steady, stable job that you enjoy doing, then you may have the option to work longer, in which case delaying retirement could work to your advantage. In doing so, you'll have an opportunity to boost your savings and also hold off on claiming Social Security, which is a guaranteed way to boost those monthly benefits for life.
3. Is my job putting my health and safety at risk?
If the job you do is bad for your health -- not just during the pandemic, but in general -- then delaying retirement may not be the right call. Imagine your job raises your stress level and exacerbates preexisting medical conditions you have. Holding off on retirement could, in that situation, be downright dangerous.
4. Will I enjoy the start of retirement if the pandemic is still raging?
If you were planning to retire next year and aren't sure if you should delay or not, ask yourself whether the pandemic will impact your plans in an unfavorable way. If your goal in retiring is to spend more time with family and pursue local hobbies, you may still be able to do those things, even if the pandemic doesn't wrap up in the near term (though vaccines are in the pipeline, it could be a while until they're widely available). On the other hand, if you've always wanted to spend the early part of your retirement traveling, you may not get to do that right away if your plan is to retire soon. In that scenario, you may be better off delaying retirement to save more, and then using that money to really live it up once the world returns to normal.
Delaying retirement is a decision that could have both a financial and mental impact, so don't rush into it. Think about what you stand to gain and lose by postponing retirement, and with any luck, you'll wind up making the best choice for yourself.