Retirement Planning: 2 Key Reasons You Shouldn’t Bank on Working Longer
Written by
Adam Palasciano
Edited by
Nicholas Morine
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Retirement should be a time of rest, relaxation, and enjoyment. Entering your golden years with financial peace of mind is crucial. You might consider working as long as possible to increase your finances, but that might not be in the cards.
Most Americans Are Retiring Earlier Than Planned
For many, there’s a gap between the expected retirement age and their actual retirement age.
As of 2024, many Americans expect to leave the workforce by 63. While 63 is the average anticipated retirement age, many workers are actually retiring at 62, as explained by U.S. News & World Report.
However, working longer (if possible) can have a positive financial effect. Here are a few reasons why:
- You’ll continue to collect a paycheck for more time and avoid touching your savings.
- You’ll have more working years under your belt, which should allow you to hold off on collecting your Social Security benefits. The longer you wait, the larger your monthly benefit will be for the rest of your life.
- Your investments will have more time to grow and compound before you start making withdrawals from your retirement accounts.
While there are financial benefits to working longer, you certainly can’t plan on it.
Why You Shouldn’t Count On Working Longer
Here are two reasons why counting on retiring as late as possible might not be the best plan.
You Could Be Forced To Retire Early Due To Unforeseen Circumstances
CNBC reported that Americans generally retire earlier than planned often due to factors beyond their control. These typically include job loss, poor health, or the development of a disability.
Job Loss At An Older Age Can Be More Difficult To Recover From
Job loss at an older age can be even more challenging.
For example, you could experience a layoff in your 50s and get forced out of your job before you’re financially ready to retire. In some cases, this is a result of ageism in the workplace. Finding a new job that pays as much as before is often far more difficult for people in their 50s than it is for those in their 20s and 30s.
Overall, financial planning from an early age is crucial to ensure long-term financial stability, especially if you’re forced to retire earlier than planned.
More From GOBankingRates
