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?