Key Points
If you’ve put in a fair amount of time in the workforce, you may be gearing up to bring your career to a close. But retirement is a financial decision as well as a lifestyle choice. And it’s important to make sure you’re prepared for it from all angles.
Even if you’ve reached an age where many people you know are retiring, it doesn’t necessarily mean the time is right for you to call it quits. Here are a few signs you may want to delay retirement and work a bit longer.
1. Your savings make you nervous
There’s no single IRA or 401(k) balance that guarantees you’ll have enough money to do all of the things you want to do in retirement. But if the amount you’ve saved doesn’t give you confidence, that’s reason enough not to retire just yet.
If you’re constantly worried about money, you may not be able to enjoy retirement. And if you haven’t saved enough to do the things you really want to do, you may find that stage of life unfulfilling.
Working a bit longer could, in that case, provide more financial flexibility. You’ll have additional time to contribute to a retirement account, all the while preserving the savings you’ve already built a little longer before withdrawals begin.
2. You still enjoy your job
Not everyone hates their job and counts down the days until they can leave for good. If you find your work meaningful, have a great relationship with your coworkers, and appreciate the routine your job provides, you may not want to retire just yet — even if your savings tell you that you can.
Continuing to work may be a smart move if you’re not ready to give up that part of your life or the social connections that come with it. If anything, you may want to see if it’s possible to do a partial retirement where you cut back on hours but maintain your job a bit longer.
3. You’re not yet eligible for Medicare
If you’ll retire before becoming eligible for Medicare, you’ll need a plan for health insurance. But whether it’s COBRA or a new policy you buy yourself, putting coverage in place could be significantly more expensive than your employer-sponsored health plan.
This isn’t to say that retiring before you become eligible for Medicare is always a bad idea. But if you’re worried about the amount of money you’ve saved, dipping into your IRA or 401(k) to cover health insurance premiums may not be the best thing to do.
4. You don’t know enough about how Social Security works
Even with decent savings, Social Security may end up playing an important role in your retirement finances. But if you have no idea how Social Security works or when to claim benefits, you may not want to retire just yet.
Your Social Security filing age directly affects how much money you’re eligible for each month. Claiming before full retirement age permanently reduces your monthly checks, while delaying benefits gives them a permanent boost.
If you’re unclear about when to claim benefits or how Social Security fits into your overall retirement plan, then it may make sense to keep working and take your time to do the research. A little extra preparation could help you maximize one of your most valuable retirement income streams.
5. You don’t know how you’ll fill your days
Many people spend years planning for retirement financially but give little thought to what they’ll actually do once they stop working. If you don’t have any clue as to how you’ll spend your newfound free time, you could end up bored, isolated, and overwhelmingly unhappy.
Before you hand in your notice at work, think about this aspect carefully. Maybe you’ll fill your weeks by traveling, volunteering, taking classes, caring for grandchildren, or finally pursuing hobbies you’ve put off for years. But if you don’t have any sort of concrete plan, you may want to stay at your job while you figure it out.
You may have your mind set on a certain retirement date you established years ago. But there’s no shame in putting retirement off if you don’t feel ready financially, logistically, or emotionally. Working a bit longer could strengthen your finances and help you approach that next stage of life with more confidence.
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