For some, the ideal time to retire is early, perhaps in their 50s. Many others wait until their full retirement age, which for most Americans is 66 or 67. There are also people who prefer to continue working and earning income indefinitely.
Have you considered never retiring? Here are several reasons to stay in the workforce:
1. Your investments can grow.
2. You will get a higher Social Security check.
3. You can enjoy fulfillment at work.
4. You will lead an active lifestyle.
5. You can learn new skills.
1. Your Investments Can Grow
While you can make penalty-free withdrawals from your 401(k) or IRA starting at age 59 1/2, you don’t have to take required minimum distributions until after age 72. If you decide to continue working, you can continue to live on the income you’re generating while the investments in your retirement accounts keep growing. If market conditions are favorable, you may be able to build a larger nest egg over time.
2. You Will Get a Higher Social Security Check
For most workers, the full retirement age is 66 or 67. If you are eligible for Social Security, you’ll receive your full benefit once you hit this mark. You can also draw benefits earlier, starting at age 62, for a reduced amount.
But there are good reasons to wait. “Before your full retirement age, your Social Security increases an average of 6% per year from age 62 to full retirement age of 67,” Kris Whipple, partner and financial advisor at Kristopher Curtis Financial in Nashville, Tennessee, said in an email. “From age 67 to 70, your Social Security increases an average of 8% per year, meaning each year that you defer your Social Security, you have guaranteed growth by a government-backed entity to your retirement.”
If you wait until your full retirement age or later to take Social Security, you’ll be able to earn income without facing any reductions in benefits. Those who tap Social Security benefits before their full retirement age and continue to work will receive benefits up to a limit, and after that point, their monthly check will be lowered by a certain amount. In 2024, you can earn up to $22,320 if you take Social Security benefits before your full retirement age. Once you make more than that, $1 in benefits will be withheld for every $2 that you earn. If you reach your full retirement age in 2024, you can make up to $59,520. After that, $1 in benefits for every $3 of wages higher than the limit will be withheld.
[See: 10 Strategies to Maximize Social Security.]
3. You Can Enjoy Fulfillment at Work
Even if you have enough saved to retire, you might still enjoy the office culture and making contributions to achieve company goals. “After working for so many years, simply stopping work can be a challenge for many, especially someone that doesn’t have many hobbies,” Joseph Favorito, a financial planner and managing partner at Landmark Wealth Management in Melville, New York, said in an email. “Many people simply need a place to go to feel productive.”
You might talk to your employer about the possibility of staying on as a consultant or in your same role but on a part-time basis. “I have had many clients that continued to work because they felt good about being productive, and it simply kept their mind sharp,” Favorito said.
4. You Will Lead an Active Lifestyle
Whether you commute or work from home, “remaining in the workforce can offer significant mental and physical health advantages,” Khwan Hathai, a certified financial planner and founder of Epiphany Financial Therapy in Denver, said in an email. “The routine and demands of a job can help maintain a certain level of physical activity, which is crucial for overall well-being.”
You may also get a chance to learn from younger workers and share insights from your experiences. “Staying employed often means continued interaction with colleagues and maintaining a sense of community, which can be particularly important for emotional health and a sense of belonging,” Hathai said.
5. You Can Learn New Skills
If you stay in the workforce, you’ll have an opportunity to refine and enhance your skills. You might aim to specialize in an area or take a course to boost your knowledge. Never retiring might be a mindset that you adopt as well. “It’s a choice that offers a pathway to not only financial security but also personal fulfillment and continuous development,” Hathai said.
[READ: What Is the $1K Per Month in Retirement Rule?]
Decide Whether You Should Never Retire
Evaluate your health and personal situation as you weigh your options. Some people may find that as they age, work demands are more than they want to manage. “Assessing the sustainability of their current role — both physically and mentally — is also crucial,” Hathai said.
You might talk to friends who have continued to work and ask about their experiences. They could provide insight on what they appreciate about working, and whether they plan to ever retire. Once you’ve had a chance to review your finances and unique situation, you can set a goal — which might mean saying no to retirement.
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5 Reasons You Should Never Retire originally appeared on usnews.com
Update 12/01/23: This story was previously published at an earlier date and has been updated with new information.
