Some people hate their jobs so much that toward the tail end of their career, they find themselves counting down the minutes until retirement arrives. In fact, it's not unusual to retire early due to hating a job and feeling burned out from one.
But what if you're in the opposite boat? What if you love your job and get satisfaction from it?
In a recent MassMutual survey, 10% of retirees ended their careers later than planned, as opposed to the 48% of whom retired earlier than they'd initially anticipated. But among late retirees, 38% pointed to satisfaction with a job as a reason for extending their careers.
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Now you might have a certain retirement date in mind. But if you love your job, you may want to consider keeping at it for one extra year. Doing so could benefit you as a retiree in several ways, like these.
1. You can add to your savings and leave your nest egg untapped
It's a not a given that you'll immediately need to start taking 401(k) or IRA withdrawals as soon as you retire. But that's also not so uncommon. By working a year longer, you can potentially add to your savings a bit. But just as importantly, you can keep your balance untouched an extra 12 months so that it grows even more.
Let's say your plan is to retire at age 63, at which point you have a nest egg worth $1.2 million. Even if you contribute nothing to that account but work another 12 months and leave it alone for an extra year, you'll gain an extra $60,000 if your portfolio generates a relatively conservative 5% return. Plus, you might be able to sneak a few extra thousand dollars into your account by making contributions from your earnings.
2. You can delay Social Security and score a higher monthly benefit
Just as you may not necessarily tap your nest egg the moment you retire, you might also hold off on claiming Social Security for a bit after wrapping up your career. But again, it's not so unusual to sign up for Social Security in conjunction with retirement. So if you're able to wait a year to do so, you're likely to snag a boost to your monthly benefits.
Social Security eligibility begins at age 62. And you're entitled to your complete monthly benefit based on your personal wage history at full retirement age (FRA), which is 66, 67, or somewhere in between, depending on your year of birth. You can also delay Social Security past FRA for boosted benefits up until age 70.
So let's say your plan is to retire at your FRA of 67, but you're happy at work. If you stay at your job an extra year, that could allow you to delay Social Security to age 68, boosting your monthly benefits by 8% in the process.
3. You may not have to worry as much about health coverage
Many people's health insurance coverage is tied to their jobs. So staying at yours an extra year could mean you're not scrambling to put coverage in place.
Medicare eligibility starts at age 65. But let's say you were planning to retire at 64. If you like your job, staying there another year could mean moving from a subsidized employer health plan over to Medicare seamlessly.
It pays to be flexible with your retirement date
It's one thing to stick to your planned retirement date because you're not happy at work and can't wait to leave. But if your job actually brings you satisfaction, then staying even one extra year could do your finances a lot of good.
Even if you don't love your job, as long as you don't utterly hate it, consider the benefits of a slight career extension. You may find that putting in an extra 12 months in the workforce makes your retirement a lot more comfortable.
