look forward to retirement and a chance to enjoy the laid-back, leisurely
lifestyle a full-time job just doesn't allow for. Unfortunately, the majority
of workers today might have to wait a bit longer before bringing their careers
to a close. Roughly 60% of Americans are very likely to work longer than they
initially planned, as per a recent study by
the Indexed Annuity Leadership Council (IALC), and the reasons very much boil
down to money.
longer certainly has its share of benefits. But you should know that
if that's not the road you want to take, there are other ways to set yourself
up for a secure retirement.
Why it pays
to work longer
benefits of working longer are multifold. For one thing, the longer you work,
the more opportunity you'll have to pad your nest egg, whether you do so by
maxing out your 401(k) or saving a few extra hundred dollars a month in an IRA.
Just as importantly, the longer you work, the longer you'll avoid withdrawing
from your nest egg, since, conceivably, your paycheck should be enough to allow
you to leave your savings alone. And the longer your nest egg remains
untouched, the greater its chances of lasting throughout retirement.
can also help from a Social Security perspective in that holding off on filing
for benefits can cause them to increase. For each year you delay benefits past
retirement age, you'll boost those monthly payments by 8%. Therefore, if
working a few extra years allows you to wait on Social Security and raise your
benefits, you'll be guaranteed a higher income stream for life.
avoid working longer
benefits of working longer, it's not the right move for everyone. After all,
you're apt to have more energy to travel and partake in leisure activities in
your 60s than in your 70s, and the longer you wait to retire, the more you run
the risk of not getting to do all the things you've been imagining. Therefore,
if you're eager to retire
on time, or even early, you'll need to commit to that goal during your
As you can see,
saving just $400 a month won't cut it if you're first starting out in your 50s.
But if you make an effort to start building your nest egg early on, you'll be
better positioned to retire on schedule.
move to make if you want to retire on time is to invest your savings
aggressively, which means going heavy on stocks. The 7% return we used above is
actually a bit below the stock market's average, and it's a reasonable
expectation for a long-term stock-oriented portfolio. But if you play
it too safe and generate, say, a 3% return, you'd wind up with just
$362,000 by saving $400 a month over a 40-year period rather than $958,000.
Granted, that's still a lot more than what many of today's older workers have,
but it'll buy you a lot less financial security than $958,000.
consider getting a side
hustle if you're older and no longer have the opportunity to invest as
aggressively or grow your savings over a lengthy period of time. In the
above-mentioned study, 14% of U.S. adults are working a second gig to boost
their retirement savings, so if you're willing to put in a little extra effort
now, it might you buy a timely escape from the workforce in a few years.
longer can be a good way to boost your savings and sustain your nest egg, if
that's not what you want to do, there are ways around it. It
may take some effort, but if you set your sights on retiring on time, chances
are, you'll get to do just that.
wealthier with these 5 little-known tips
If you're like most
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a handful of "retirement secrets" could help ensure a boost in your
retirement income. For example: one easy Social Security trick could pay you as
much as $16,146 more... each year! And this Medicare tip could save you $5,628
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here for the original article from The Motley Fool.