If you're thinking that 2026 will be the year you retire, you may be getting increasingly antsy by the day -- in a good way, of course.
Retirement is definitely a period of life to look forward to. And if you've saved well for it, you may be more than ready to kick it off.
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But before you make your retirement official, you should know that working a bit longer could put more money in your pocket each month from a Social Security standpoint. Here are two ways that might happen.
1. You can potentially avoid reduced benefits -- or even boost your benefits
You're eligible to sign up for Social Security at any point once you turn 62. But you won't get your monthly benefits without a reduction unless you wait for full retirement age to file. If you were born in 1960 or later, full retirement age is 67.
If you won't be reaching full retirement age in 2026, and you retire and claim Social Security, you'll automatically lock in smaller monthly checks. But if you work longer, you may be able to hold out until full retirement age, thereby avoiding a reduction in those monthly payments.
Furthermore, if you delay your Social Security claim past full retirement age, for each year you hold off, your monthly benefits will get an 8% boost. So even if you'll be reaching full retirement age in 2026, if you work longer so you can put off your claim, you'll snag larger benefits that could come in handy for a variety of reasons, be it higher-than-expected healthcare costs or a newfound love of travel.
2. You can become eligible for larger benefits by boosting your wage history
The monthly Social Security benefit you're eligible for in retirement is based on your 35 highest-paid years of wages in your lifetime. But if you don't have a 35-year earnings history, you'll have a $0 factored into your benefits formula for each year you didn't earn wages.
If you work longer, though, you can replace some of those $0 years with actual wages, leading to larger benefits on a monthly basis. And even if you have 35 years of wages under your belt, you may be earning more money now than you did years back. Replacing a year of lower earnings with higher earnings could also boost your benefits on a monthly basis.
Working longer doesn't have to mean leaving things status quo
If you've been looking forward to retiring in 2026, you may not be too thrilled to change your plans and plug away at your job for another year or two instead. But you also don't necessarily have to do that.
Thanks to the gig economy, these days, working longer doesn't have to mean staying with the employer you've been with for the past 10 or 15 years. Rather, you could start your own side hustle (or full-time hustle) or consult in your former field if you find the work itself enjoyable.
Another option you can consider is staying with your current employer, but seeing if they'll allow you to drop to a three-day schedule instead of five days a week. Not only might that put more money in your pocket, but it could allow for a smoother transition into retirement.
An option worth considering
If you've approaching retirement with a lot of money in your IRA or 401(k), and you're happy with the monthly Social Security benefit you're in line for, then you should feel comfortable moving forward with your plans. Also, it's not a given that if you're retiring in 2026, you'll be claiming Social Security in 2026.
The point, rather, is to understand the different ways working a bit longer could boost your monthly Social Security checks. If you feel you could use larger benefits, it could pay to delay your retirement a bit longer -- especially if you're able to pivot into work you find interesting and rewarding in the interim.
