Will you have enough money to last the full length of your retirement?  People are living longer, fuller and more active lives… and while living longer is a good trend, it also means that your assets will have to last longer. With this in mind, does it make sense to delay retiring?

As you think about that question, consider these facts: In 1960, according to the National Center for Health Statistics, a person age 65 could expect to live another 14 years. But by 2002, that increased to 18 years.

Now consider that the rising costs of heathcare and inflation may mean you’ll need to take additonal funds from your nest egg as retirement lasts longer.

Clearly, guaranteeing that your savings will last throughout your retirement can be a difficult task. There is a way to help slow down this increased demand and generate more income in retirement: delay retiring.

By delaying retirement you have the ability to:

Continue Contributing to your savings—If your contributions continue, you will potentially increase the amount available to you when you do decide to retire. Over time, the more you have contributed can mean more money to fund your retirement when you do decide to beign withdrawals. Since you are waiting longer to tap into these contributions, there is a good chance that there will be more available to you when you’ll need it. Continuted contributions can also reduce your taxable income because income taxes aren't assessed on contributions until the money is withdrawn from the plan. 

Take advantage of a decrease in the time you’ll need your money—Delaying your retirement also means the money you have saved won’t have to last as long. Your money can go further over a shorter period of time. In addtion to delaying the time you will need the funds, there are other benefits to prolonging withdrawal, such as an increased payout of your Social Security benefit. 

The Social Security system entitles you to an increased amount in benefits for each year you wait to claim them—up until age 70. If you retire at any time between age 62 and your full retirement age, your benefits are permanently reduced by a fraction of a percent for each month before your full retirement age. Simply put—waiting to claim your Social Security, like your retirement savings means more income for you when you decide to begin receiving this benefit.

Delay the withdrawal of funds from your retirement vehicles—Investing your money for a longer period of time means you have more time to accumulate earnings on a tax-deferred basis. The longer this money stays invested, the longer you can take advantage of the ability of your investments to generate earnings, which are then reinvested in order to generate their own earnings.

So, as you grow closer to retirement, carefully consider how much money you will need for retirement and how long you will need to maintain your standard of living during those years. It may also be a good idea to reference the article in this section of our website dealing with how to plan a tax-smart withdrawal strategy for your retirement. Delaying your retirement—and keeping your money invested longer—may be an excellent way to ensure that you have enough to live a more secure and comfortable retirement lifestyle.