Benefits of Retiring after Sixty-Five

Retirement can come at any age.  It doesn’t have to be at age sixty-five.  People retire earlier for many reasons.  But, there are benefits to waiting until that magic number to officially hang up your work clothes.

Some people will have many jobs in their lifetime.  For baby boomers, it was more the norm to have one job and stay there for thirty years.  After thirty years with a state or federal job, you can draw a pension.  Some people retire then. 

Companies with employees that are approaching the retirement age may offer incentives to them to retire early.  By doing so, a company can lower its overheads and hire two people fresh out of college for less than it was paying one older employee.
Many baby boomers are working longer than their younger counterparts.  Even if they have thirty years in, they are continuing to work until the government appointed retirement age.  To their way of thinking, there are benefits in doing so.

People are living longer.  This is a good thing.  Where retirement used to last for ten or fifteen years, it is now lasting twenty to thirty years.  A person can be retired almost as long as they have worked.  As such, more money is needed for expenses.  These expenses include medical care, housing considerations, and leisure activities.  Did you know that the age that seniors can start drawing their social security is sixty-two years of age?  You might say that that means you can cut three years off of your working life.

However, listen to this.  A person who retires at sixty-two will not receive their full social security benefit.  You know that statement that is sent out each year to you that tells you what you would earn per month if you kept the same earnings until retirement?  This is your full retirement, but that is not what you will receive if you retire at sixty-two.

For baby boomers, in order to receive 100% of the retirement benefit owed to them, they would have to work until they are sixty-six!  Even those people who turn sixty-five this year will have to wait an additional ten months to receive a full benefit. 

Retiring early will mean a twenty-five percent reduction in the benefit received from social security.  This will continue for the entire time that you are retired.  Just four fewer years and you lose a quarter of the money that you would otherwise be getting. 

There is a bright spot.  You can continue to work those four extra years but you can’t make over a certain amount of money.  This sounds okay if you have saved accordingly.  A full time worker can go part-time for four years and still be eligible for full social security benefits when they turn sixty-six.

There are benefits to working after age sixty-five.  You can continue to work but at a more leisurely job until the benefits of social security kick in for you.