10 Reasons Why You Might Think About Delaying Your Retirement

Reaching that final milestone in a decades-long parade of work and leaving the grind behind is a rite of passage that virtually everyone looks forward to reaching — someday. Whether you're a young upstart just finding your footing on the corporate ladder or a 60-something in the final gasps of a long and fulfilling career, retirement planning and solid fundamental knowledge remain crucial guideposts. Official retirement age in the United States is 67 for those born in 1960 or later, meaning 100% Social Security benefits can be attained at this point.

But this doesn't mean that everyone will retire at 67 — some supercharge their retirement savings strategies in order to leave the workforce early while others might never find the right time to fully hang up their boots. Aside from the most obvious culprits that might force a worker to retire later, there's actually a wide range of more positive reasons you might consider delaying your retirement. From the lifestyle benefits attained through the workplace to simply loving what you do, numerous positive attributes can entice a worker to remain in their employment relationship, even when other needs have been met that will allow for a fulfilling and prosperous next act.

Perhaps the best reason to delay your retirement involves your relationship with the workplace itself. Many people simply love what they do, and retirement will sever that connection with this fulfilling activity. A job or team that makes you feel impactful and important can act as a strong motivation to stay employed. This is obviously a wonderful goal for any workplace, but it may be harder to find than you would expect. BLS data from 2022 suggests that Americans change jobs roughly every 4.2 years, with younger people making career jumps at an even faster rate. This illuminates a general working landscape in which better benefits, higher pay, or the prospect of a more friendly workplace and team can often be found elsewhere rather than within an existing company. This may be partially due to a shift in the way company loyalty works these days, but whatever the underlying reasons the trend remains clear.

This isn't to say that your job necessarily feels vapid or soul crushing. Beyond the benefits and financial incentive to continue showing up every day, it's entirely possible that you enjoy a wonderful rapport with the people you work with and gain a sense of fulfillment and enjoyment from your interactions. If you enjoy what you do this much, is absolutely worth considering a delay to your retirement.

Your paycheck is just the tip of the iceberg when it comes to benefits that a job may provide, with access to health care, retirement matching options, and even things like a company car or access to event tickets rounding out a typical compensation package. These fringe benefits can add immense value to a worker's lifestyle, and changing jobs or leaving the workforce entirely cuts off access to these additions. An important one is health care coverage. Insurance plans that go through an employer may be immensely valuable for their cost-cutting efficiency or versatile coverage categories. Older Americans with an existing injury or treatment need might consider staying on for a little while longer in order to continue enjoying the benefits of an employer-driven insurance policy. Planning a knee surgery, laser eye operation, or substantial dental work might be time consuming, prohibitively expensive without this coverage, and require some significant lead time.

Alternatively, the "fun" fringe benefits are also something that you'll miss when you leave the workforce. Things like access to great tickets for your local sports team or covered membership fees for your health club are wonderful inclusions that will simply vanish once you decide that it's time to retire. Someone who is particularly fond of these kinds of amenities might consider staying on for just a little bit longer in order to really use up these benefits for all they're worth.

Inflation is easier to deal with when you are working, there's just no way around this reality. Experts at T. Rowe Price suggest a 75% income replacement figure, while AARP offers a figure of 80%. This means that you'll generally need less money to support yourself in retirement, but also that those hitting their target savings goal will naturally have less to work with. Inflation is a sore spot for consumers at all stages of life, but those who are working generally have more income available to them and therefore a wider capacity for financial decision making. Drawing down on your retirement savings with greater weight in order to ride out a period of high inflation will exponentially impact what you have left to support you moving forward.

If you are nearing retirement age and happen to be living through a period of high inflation — such as the economic troubles that have plagued the marketplace in recent years — then a delay to your exit might be well-timed. Rather than falling back on your retirement savings during a period of increased costs, remaining in your salary position and continuing to save for an extra few months or even a couple of years will put you in an even better financial position. Not only will this give you extra time to save, but it will also insulate your retirement savings against temporarily heightened spending requirements right as you plan to start utilizing these funds.

NIH research notes that aging plays a role in gradually increasing risks associated with heart disease and other health risks. But a 2013 study out of the U.K. notes an uptick in incidence of clinical depression by 40% specifically, and Harvard Medical School found in 2012 that 40% of retirees were at increased risk of heart attack or stroke versus those still engaged in the workforce. Another study (per NIH; from 2021) notes that a shift in physical and mental activity norms might be the culprit here, and that retirement allows for a steep drop off in a person's performative demands. Yet another piece of research conducted in 2016 found that delayed retirement shared an association with a decreased risk of dying, independent of pre-retirement personal health (via NIH).

Prolonged physical and mental activity correlates with improved health, even in older age when plenty of other factors combine to increase the chances of health scares and illness. For someone who isn't itching to get out the door, a little more time in the workforce might be a wholly beneficial choice that supports improved heart health and mental wellbeing. Vanguard notes that staying active in retirement is a solid way to lower your risk of heart disease and stroke, and exercise and physical activity can lower your blood pressure, too. If you ultimately decide to retire on time, finding a physically and mentally challenging activity to take up might be a crucially important task.

Regardless of your decision to remain in the workforce or leave it, one choice you'll have to make at some point is when to begin taking your Social Security benefits. Social Security payments can begin after your 62nd birthday, but if you choose to take Social Security early you'll receive a reduced payment figure. At 62 you're entitled to just 70% of your full benefit. But these payments aren't the only thing that those nearing retirement should consider, and delaying the start of your Social Security payments can work in your favor.

If you choose to retire at 67 or earlier, it might be difficult or impossible to delay your Social Security payments. But if you choose to delay your exit by just a year or two, then there's really no need to start taking Social Security benefits. At 68, you'll be entitled to 108% of your full benefit while waiting till you're 70 offers a benefit that rises to 124%. Every individual choice will be based upon unique factors. Some people might decide to take their Social Security benefits early or at full retirement age while continuing to work for an extra year or more, while some may be able to retire and still delay the start of their payments. Regardless, the best way to maximize your Social Security checks is to work a little bit longer in order to support your lifestyle without the help of your Social Security contributions coming to fruition.

Added time in the workforce creates more years in which a saver can put aside money for this huge transition. There's no getting around the fact that each year you work offers a year of salary payments that can be used to support everyday spending and the savings goals that you have for yourself and your future. The main feature that must be contended with when considering how much money you need in your retirement accounts is the drawdown rate. Financial advisors like Dave Ramsey assume a blanket drawdown figure of 8% — one of his worst pieces of financial advice — while others focus on the 4% rule (drawing down 4% of your portfolio value in the first year and then adjusting for inflation in each subsequent year).

Drawdown figures are the name of the game when creating a retirement account that will support you through the rest of your life, not just a couple of years of retirement. Therefore, the more you put away the better off you'll be when flipping the script and starting to withdraw from your investments rather than add to them. With an extra year or two alone, prioritizing retirement saving can add thousands or more to your total portfolio value, massively altering the conversation you'll have with yourself when it comes time to budget for routine expenses during your post-working life.

Many workers carry a wide range of debt products and pay them off monthly. Some people may be trying to reduce or eliminate credit card balances, while others gearing up for retirement are focused specifically on tackling the final payments of a mortgage or car loan before leaving the workforce. If you are nearing the end of your payments on a loan, especially one that's fairly expensive to maintain, then it might be worth considering a delay in your retirement plan to shift this debt before entering retirement and beginning to rely on Social Security, pension benefits, or your investment assets. Taking care of these debts ahead of your exit will make for smoother sailing when planning your life as a retired person.

These issues overwhelmingly add stress to a person's plate. According to APA reporting from 2014, 71% of survey respondents noted money worries as a main source of stress in their lives. In 2024, Bankrate reported that 47% of U.S. adults say money negatively affects their mental health. Getting beyond major stressors before making a substantial change to your financial picture is a great way to handle this significant area of mental anguish. With more free capital available to you, living life to its fullest becomes the primary goal each day. If an extra few months or years in the workforce can bring this level of peace to your retirement, it's worth considering a delay to eliminate a major source of financial outflow.

If you delay your retirement, you can also defer the tax burden on some of your retirement assets. For those working past 73, your traditional IRA will be required to deliver required minimum distributions to your checking or savings account, but you may be able to delay this distribution requirement from your workplace 401(k) plan.

There is a host of potential benefits and problem areas at play when it comes to taxes and retirement assets. It's often a good idea to speak with a financial professional regarding your own unique circumstances and the strategies that will best support your physical needs, however, a range of general approaches remain viable for the typical worker in this phase of life. Tax professionals may suggest, for instance, a loss harvesting strategy within accounts with deferred tax adjustments (like a traditional IRA). This can be used to offset some of the capital gains you've enjoyed on investment assets while also shedding under-performers and deadweight in an effort to rebalance your portfolio for continued growth and success.

You may have always dreamed of a career change but could never make it happen for one reason or another. Your later years are a prime opportunity to make a change of this nature. Regardless of the workplace you've considered moving into, if you are nearing or have reached retirement age and can afford to leave the workforce, you can also afford to take on an unpaid internship, entry level job, or perhaps even go back to school to earn a qualification in the field (or just to study for the joy of the experience). Some people who have spent their entire working years sitting behind a desk might consider a change that sees them working outside in the sun.

In the same way that remaining in your current job because you love what you do might be worthwhile even when retirement is attainable, this time in your life is a great opportunity to make a wild shift. Chasing after a dream for a year or two and doing something totally different can be seriously life-affirming. As well, you might make the change only to discover that staying in your long term employment role was actually the best option all along. Many people romanticize opportunities missed or alternative paths not taken only to discover that these different choices wouldn't have brought more happiness or fulfillment.

Finally, after you turn 50 you are able to contribute more to your retirement accounts. Your Roth IRA contribution limit rises by just $1,000, but the 401(k) contribution cap gains an additional $7,500. These catch-up contribution limits allow people to make substantial progress toward their retirement investment goals, even if they started later then they wanted to. If you are quickly nearing retirement and have prioritized saving for the transition, every additional year you can set aside an increased volume of funding is one more year that adds substantial weight to your portfolio. Likewise, each year offers another period of compound interest opportunities (ballooning your net worth). Not only are you gaining additional time to invest money in your retirement, you're gaining time for that money to work on your behalf.

These expanded contribution caps provide an excellent framework for a retirement planner to hit their savings targets and then leave the workforce on their own terms. Even one extra year beyond when you hoped to retire can make a massive difference in the longevity of your retirement funds. Remember, saving for retirement isn't about heaping money into an account that you'll simply withdraw from at will when needed. Building a retirement portfolio is an effort in creating investment income that will last you for the rest of your life. Every dollar you are able to sock away generates more that will support you for years, if not decades, to come.