Retiring a year or two later can make a HUGE difference in your retirement lifestyle.
A new study by the National Bureau of Economic research (Yes, I do keep up on these things.), has found that staying on the job even one additional year longer beyond age 66 would typically result in 8-10% more in income annually. This can make a big difference. For example, an expected annual retirement income of $50,000 from both Social Security and retirement, can increase by $4,000-$6,000 annually simply by working an extra year. Working three extra years rather than one means nearly 25% or more annual income.
There are a number of reasons that delaying retirement, even for only one year, is so great. First, you start taking Social Security benefits later so they will be higher. Secondly, you can contribute more to a 401K or IRA account. Third, it results in one more year of earnings into the retirement account before you begin to tap into your funds. While you are working, you won’t be using any retirement savings.
Bottom line: delaying retirement for at least 1-4 years can have a huge impact on your retirement life. For the reasons given above, I have delayed my retirement until age 70, which will not only increase my retirement account balances but will also maximize my Social Security retirement benefit for both me and my wife in case you are curious about what I am doing. Please feel free to share this post using the buttons below.
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