Why delaying retirement may not save you from inadequate savings
Planning to extend your working years is a common strategy for many Americans who are concerned about their retirement savings. According to a recent survey conducted by CNBC and SurveyMonkey, about 27% of workers are considering working in retirement to supplement their income. While working longer may seem like a good way to boost your savings, experts caution that unforeseen circumstances like health issues or job loss could derail this plan.
It’s important to note that many workers end up retiring earlier than planned due to various hardships, such as health problems or layoffs. The assumption of being able to work into your late 60s or beyond may not always be feasible, as demonstrated by the fact that more than half of full-time workers in their early 50s face job loss before they are ready to retire.
Despite the potential risks, there are benefits to extending your working years if you are able to do so. Delaying retirement allows you to preserve your savings longer, potentially boosting it through investments and additional contributions. Additionally, postponing the claiming of Social Security benefits can increase the amount you receive in the long run.
Furthermore, working longer can also have non-financial benefits, such as improved health and longevity. Research suggests that the effects of working longer on health depend on factors like job-related stress and physical demands.
Overall, while the idea of working longer as a way to secure your financial future is appealing, it’s essential to consider the potential challenges and risks involved in this strategy.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.