Should You Delay Retirement?

Matthew Mullowney |

Retirement is a dream for most Americans. Sure, there are people like Warren Buffett who love to work whereas most people do not. If you're one of those people who want to retire, the question arises of when a good time to retire might be. Some people will be fine retiring next week while some should wait for a few more years.


Can You Do Without Income?

If you're working a job that pays well, it's unlikely you'll be able to bring in as much money when retired. There are exceptions to this rule. If you've routinely saved half of your income over a few decades, you might have enough stashed away to approximate your working income. If your ability to draw down your nest egg is limited by its size, you might want to keep working. Additionally, it's important to remember that most people cannot draw down from 401(k) and IRA accounts without a penalty until age 59½. If you're worried about having enough to tide you over until you hit this magic age, staying in the workforce for a few years might be a good idea.


You Need Insurance

Health insurance can be very expensive, and the older you get, the more likely you are to need it. Going without insurance means taking a big financial risk. If your employer offers health insurance for retirees and you have enough money to maintain your standard of living, you can probably hand in your notice and leave the workforce. On the other hand, you might want to stick around for a few years if your employer does not offer retiree health benefits. Medicare doesn't come into play until age 65 so you'll want to make sure you have health insurance until that point in your life.


You Don't Know What You Want to Do

Unless you have health issues that require you to retire early, it's a good idea to wait until you know what you want to do during retirement. Many people who have no plan for what to do during retirement find that they are bored after pulling the plug. You'll want to retire to something rather than just retire from your job. Travel is fun, but you could run out of new places to visit. Playing the same golf course three times a week will eventually get old. Having a hobby that brings value to your life before retirement will help you navigate your retirement without getting bored. If you don't have such a pursuit and are in good health, it might be a wise idea to keep working for a while.


You Can Cut Your Hours

If you merely want to cut back on the time that you spend at the office, you might be able to get your boss to adjust your schedule. This will likely only work if you're a great employee. Your boss may want to keep you around for a while and offer you the opportunity to work a part-time schedule to make sure that you wait to retire. Even if your boss wants you to work a full-time schedule, he or she might offer to let you work from home a few days each week. If you have a more advantageous work schedule, the additional money you bring in might make it worth sticking around for a few months or a few years.


Retirement is a goal most people have. However, not everyone should retire as soon as possible. There are some reasons you might want to keep working. On the other hand, if you're set up for retirement in terms of your income, your life's purpose and your health insurance, go ahead and retire. You've earned it.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.