Building your Nest Egg
Staying on the job for just one or two more years could help you achieve the same retirement goals and increase the possibility that your funds will last longer. It will give you another year to add to your retirement savings before you start taking withdrawals.
In addition, maximizing your contributions to an employer sponsored retirement plan, such as a 401(k) plan, can help boost your retirement nest egg.
Waiting another year also offers the opportunity to give your retirement savings more time to potentially grow. Likewise, you’ll be meeting your expenses from your earnings, not by tapping into your retirement portfolio. This will allow the money in your retirement accounts to compound for a while longer.
Postponing your retirement may have some impact on your Social Security benefits. The formula for calculating these benefits is complex, but adding another year of income may increase the size of your overall benefit. Another option that is becoming ever more viable is returning to work after retiring.
A recent study by Putnam Investments found that more than 7 million people had gone back to work after being retired for an average of 1.5 years. It is expected that this trend will increase in the future. Many are doing so because they want to use their skills and experience developed over a lifetime of work and are looking for new challenges. Many others, however, are doing so because they had not saved a sufficient amount to pay for the lifestyle they wanted in retirement. 70% of the survey respondents said they wished they had saved more and started sooner. If it is not a question of financial need, you may consider doing volunteer work.