Social Security: Why Working Longer Isn’t the Solution to Maxing Out Benefits You Think It Is

Senior male warehouse worker pulling a pallet truck with boxes.
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Working longer is often seen as a solution to various financial and benefits-related challenges. After all, delaying Social Security benefits from the full retirement age of 67 to 70 will increase your benefits by 32%, or 8% per year. Social Security’s general benefits are based on cost-of-living adjustments measured by the Consumer Price Index, resulting in corresponding increases in inflation and additional benefits.

However, it’s essential to recognize that working longer to max out your benefits may not always be the most effective or attainable retirement solution. In fact, only 5% of workers wait until the they’re 70 to claim the top benefit amount, compared to a quarter and a third of men and women who begin collecting when they’re 62, respectively, per Social Security Administration data.

According to “Overtime: America’s Aging Workforce and the Future of Working Longer,” a collection of essays edited by Lisa F. Berkman and Beth C. Truesdale, while policymakers continue to promote working longer, they are neglecting the fact that delaying retirement is an unworkable situation for many.

“Though today’s middle-aged adults are less financially prepared for retirement than today’s retirees, delayed retirement is not an adequate solution,” wrote the editors. “Precarious working conditions, family caregiving responsibilities, poor health, and age discrimination make it difficult or impossible for many to work longer.”

Most retirement experts will argue that it almost always makes sense to delay claiming Social Security if you can. But here are some things to consider when deciding whether working longer to maximize Social Security benefits is an ideal financial solution for you.

Are You Retirement Ready?

Consider Your Health and Well-Being

People are living longer and will need more money to finance their retirement years. But, as the 2022 National Bureau of Economic Research working paper stated, “Americans are notoriously bad savers. Large numbers are reaching old age too poor to finance retirements that could last longer than they worked.”

Maxing out your benefits may provide for more retirement years, but extending your working years can have adverse effects on your physical and mental health. As noted by the “Overtime” editors above, long hours and job-related stress can contribute to burnout, chronic health issues and reduced quality of life. When planning your retirement, you need to consider your work-life balance and your health and well-being.

Regretting Lost Opportunities

Working longer often comes at the expense of other opportunities and life goals. Delaying retirement can mean missing out on personal pursuits, travel, spending time with loved ones or pursuing hobbies and interests that you’ve put off while you were working.

The goal of retirement planning is to enjoy a fulfilling and comfortable retirement. It’s important to align your retirement plans with your individual aspirations and values rather than simply pursuing benefits. Working longer may not necessarily lead to a higher quality of life in retirement if it means sacrificing the years when you are most active and healthy.

Relying on Working Longer and Social Security

Life is unpredictable, and unforeseen circumstances such as health issues, family emergencies or economic downturns can disrupt your plans to work longer. Relying solely on an extended career to achieve financial security can leave you vulnerable to unexpected challenges.

Are You Retirement Ready?

It’s important to remember that retirement planning involves more than just Social Security benefits. Your retirement savings, investments, employer-sponsored programs and overall strategy play a significant role in your financial security during retirement. Delaying retirement may not compensate for inadequate savings or investment planning.

Although working longer to maximize your Social Security benefits can be a viable option for some individuals to enhance their financial security and benefits, it’s not a one-size-fits-all solution. A retirement planning approach that considers your health and well-being, your personal goals and your financial situation is essential.

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