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  • Shelley Yates

5 Reasons Not to Retire – Yet

Thinking of retiring soon? Below are a few reasons why you may actually want to hold off on retiring just yet:

  1. Lower Social Security benefits: If you claim Social Security before full retirement age,* you’ll receive a lower retirement benefit for life, which could hurt you in the long run by reducing the amount you have to spend in retirement. If waiting an extra year or so to retire means you would achieve full retirement age, it is likely worth it to wait.

  2. Limited social interaction: It would be a severe understatement to say COVID-19 has put a damper on daily life. Would you want to spend the first few months of your retirement unable to travel or do the things you’d always planned to do in retirement? Would you want to forego having a “last hurrah” with coworkers or a big retirement party? If not, you may want to continue working, especially if you’re able to do so remotely. Achieving retirement is a big deal, and you deserve the option of giving your career the send-off it deserves.

  3. Increased healthcare costs: If you wait until age 65 to retire, you'll be eligible for health benefits under Medicare. Your exact costs under Medicare will depend on your annual income and the specific plan you choose, but Medicare is cheaper than paying for private insurance. As with Social Security benefits, if waiting an extra year or so makes you eligible for Medicare, it’s likely worth it to wait.

  4. Savings shortfall: After turning 50, you become eligible to make catch-up contributions to tax-advantaged retirement accounts, so taking advantage of this benefit for a longer period of time can increase your savings. Additionally, retiring earlier means stretching your savings over a longer period of time, so an extra year or so of working can make a significant difference in how much money you have to spend for years to come.

  5. Potential boredom: Unfortunately, many people discover that once they’ve retired, the lack of a set schedule or set things to do every day can cause boredom or even depression. This can also have financial consequences, as some spend their extra time by increasing spending on entertainment or shopping. Just as you shouldn’t retire without knowing if you have enough saved, you also shouldn’t retire until you know how you plan to spend your retirement.

If you are trying to determine whether or not it’s time to retire, please do not hesitate to contact me. I’d be happy to help.

*If you were born in 1953 or earlier, you’re already eligible for your full Social Security benefit. The full retirement age is 66 if you were born from 1943 to 1954 and increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.

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