People’s lack of savings plus the recession has left an increasing number of people realizing they may need to work longer than expected. Understanding that such news may not sound pleasant, a Mainstreet article noted that you don’t have to sign on for an extra 10 to 20 years in order to afford retirement; another 3 to 5 years can make a big difference. As an example, the article looked at a 55-year-old intent on retiring in 10 years. Assuming this person has $250,000 saved for retirement and continues to save $5,000 per year, his or her monthly retirement income would be just $2,753. The calculation assumes 8 percent investment returns while working and 6 percent while in retirement. Postpone retirement until age 68 and monthly income would grow to $3,408, which the article said would be the equivalent of offsetting a $200,000 loss in one’s retirement portfolio. Hold off on retiring until age 70 and monthly income would increase to $3,940. Staying in the workforce longer would also boost your Social Security benefits.
Articles about delaying retirement are usually cast as bad news. But working beyond the typical retirement age of 65 or 67 actually has a lot of benefits beyond increased income. Researchers have found that continuing to work, at least if you find your work meaningful, can improve your marriage and boost your health.