At some point during your career, you might try to land on a specific retirement age. That age might be 65, which is when Medicare eligibility begins. Or it may be 67, which is the full retirement age for Social Security for anyone born in 1960 or later.
But you might make the decision to retire at age 70 or even beyond. And if so, you'll be in good company. That's because 39% of workers today anticipate either retiring at age 70 or later, according to a recent Transamerica survey.
Of course, retiring at age 70 or later may not be ideal for you -- especially if you work a demanding job and want out sooner. But retiring at a later age could benefit you in more ways than one.
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Less financial stress
The later you retire, the less of a strain it puts on your nest egg. Let's say you manage to save up $500,000 for retirement. If you retire at age 70, your savings may not need to last as long as they would for someone who retires at age 65.
Also, by virtue of working until age 70, you'll give yourself more time to add to your savings. This is an especially important thing to do if you got a late start on building your nest egg, or if your IRA or 401(k) plan contributions had to be paused during the pandemic or over the past year or so due to inflation.
A higher monthly Social Security benefit
If you continue to work until age 70, it's fair to assume that you'll be able to keep covering your living costs with your paycheck alone. And that could give you an opportunity to grow your Social Security benefits for life.
For each year you delay your Social Security filing past full retirement age, your benefits grow 8%. So if you're eligible for your full monthly benefit at age 67 but you hold off on claiming it until age 70, you'll grow that income stream by 24%.
That's an important thing, because declining stock market conditions could force you to cut back on retirement plan withdrawals. But your Social Security benefit will be there for you every month.
A later retirement isn't all bad
You may be thinking of retiring at age 70 or later not because you want to, but because you pretty much have to. But do remember this: A lot of people who retire at a younger age get bored quickly and start to spend down their savings at a dangerously fast pace just to stay occupied. But you don't want to end up bored, nor do you want to end up in a situation where you risk having your savings run out on you.
Leaving the workforce later in life could help you avoid these issues, all the while giving you the freedom to make the most of retirement once it finally kicks off. And so even if you've done a pretty solid job of saving for your senior years, you may decide to push off your retirement until age 70 or later just to give yourself the most flexibility possible.
