Is Working Longer a Bad Thing?

Fresh from the Employee Benefit Research Institute, a new survey found that many people plan on postponing retirement and working longer than they originally anticipated. The reasons? A bear market, economic worries, and less confidence in how much they have saved for retirement.

This may all sound like doom and gloom, but keep in mind — according to the EBRI report, the actual median retirement age is only 62. That is also the minimum age when one is eligible to receive early Social Security retirement benefits. But the survey also notes that 21 percent of respondents plan on working into their 70s. Sure, retiring before age 65 sounds ideal, and perhaps working into the 70s sounds like drudgery, but there are so many advantages to delaying retirement until age 70. F

irst, those who wait until age 70 to apply for Social Security benefits receive a delayed benefit credit, resulting in about 20 percent more Social Security income per year than retiring early. Second, those with Roth IRA accounts can contribute to them indefinitely with after-tax dollars. Third, those who choose to work beyond their full retirement age will escape the

earnings penalty, which reduces their Social Security benefits by 50 cents for every dollar they earn.

Finally, people are living longer and staying healthier into retirement years. So this may be an opportunity to regroup and change careers, or start earning money from that hobby you have tinkered with for 20 years. I am still 20 years away from retirement but this survey has gotten me to thinking about what my next career might be….actually, the thought of working on the ground crew at the airport has always fascinated me….what do you think, folks?

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Comments (4)

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  1. John Booke says:

    I think that when unemployment rises Social Security retirements spike. Look at the year-over-year data. The juicy 5.8% COLA bump for last year will bring the new 62 year olds (“Leading edge of the Baby Boomers”) out of the woodwork and into the Social Security retirement fold. The survey is a joke. If you’re 20 years away from retirement then you should look for a government job ASAP. Capitalism is a “goner.”

  2. Michael says:

    Working longer because they “want to” or “have to”? With TAXES likely to increase, retirees are finding that their “nest egg” is depleting faster than they anticipated, thus causing them to go back to work or getting a reverse mortgage after spending the last 30 years paying it off.
    I am not a proponent of Reverse Mortgages, but rather not sending extra principle payments to pay off the mortgage faster. Those dollars are better spent saving for retirement, and if they are able to put that money into tax-free accounts, they won’t have to worry about the effects of future tax increases.

  3. Tamara says:

    ….great minds think alike! Must be evident in my earlier posts that retirement is not what I focus on but what I want to do next.

  4. Nancy says:

    I agree about delaying retirement.Though when I retire,I want to work behind the customer service desk at the airlines, not in in the ground crew!