5 Reasons why People are Waiting Longer to Dive into Retirement
Reaching a certain age is no longer synonymous with retirement. People are waiting later than ever to retire, and many even intend to work for the rest of their lives if possible. Several factors have accounted for this trend, which is likely to continue in the years to come.
#1. They are Living Longer
A few decades ago, there was a sense of urgency for people to retire at age 65 or earlier. These days, that’s not so much the case, since people are living longer than ever before. Not only that, but they are enjoying better health and an overall higher quality of life during their senior years. As such, people can easily retire at age 70 or beyond and expect to enjoy 20 or more years of healthy activity.
#2. They are Waiting on Bigger Social Security Benefits
While it is entirely possible to retire at age 62, those who do so will notice lower retirement checks than those who wait until their mid-60s or beyond. Individuals who retire early may receive up to 30 percent less than those who wait. It’s a complicated formula, but the Social Security Administration generally reduces benefits by 5/9 of 1 percent for each month before full retirement age, and there may be limits on income as well.
#3. They’ve Lost their Retirement Accounts
For many people, waiting to retire isn’t an option-it is a necessity. During the housing crisis that began in 2008, many people noticed their life savings and/or retirement accounts drastically shrinking or even being eliminated altogether. A good number of them have been working diligently since then to restore their accounts, meaning they are now employed when they might have otherwise been retired.
#4. They Wish to Stay Active
People are increasingly noticing the mental and physical benefits of staying active. A number of studies show that mental stimulation can help prevent or delay the onset of Alzheimer’s disease or dementia. As such, those who work in industries that require cognitive thinking skills can greatly reduce their risk. Staying physically active can have numerous benefits as well, ranging from reducing the symptoms of arthritis to helping people maintain a healthy weight and reduce their risk of heart disease.
#5. They Need Healthcare Benefits
Even seniors who are in relatively good health are often surprised to find out their Medicare benefits do not cover all their healthcare expenses. Those who are concerned with rising healthcare expenses may therefore elect to continue working in order to take advantage of the medical plans and health savings accounts provided by their employers. This is particularly true for those who require certain medications that come with high Medicare co-pays, as many employer-sponsored drug plans offer free or low-cost prescriptions.
There is no one reason that is more common than others when it comes to extending retirement age. Instead, those who continue working later in life will likely cite two or more of the above reasons as justification for doing so.