The best non-financial reason to delay retirement
You’ve probably heard a number of good reasons to continue working longer than you may have to. The most prominent are financial.
For example, qualifying for higher Social Security benefits. Every year you delay claiming your benefits from age 62 to 70, your monthly check can increase by about 8%.1
By continuing to work past what’s commonly regarded as retirement age, you can also maintain the continuity of your peak earning years’ income.
And of course, by delaying retirement you delay withdrawing from your retirement savings, which may also give you more financial flexibility.
However, there’s a very good reason to delay retirement that has nothing to do with money. Recent studies have shown that those who work longer delay the onset of cognitive decline that comes with aging.
Mark Hulbert, writing for MarketWatch, says that there’s a lot of anecdotal evidence that putting off retirement can slow cognitive decline. “But actually proving it has remained elusive since doing so requires teasing apart the interactions between myriad different factors and trying to determine cause and effect.”
For example, it’s easy to argue that those who continue working past typical retirement age simply have the kinds of jobs that keep them mentally engaged. Or that the kinds of people who work longer simply do so because they are already less likely to suffer decline.
However, a 2021 study by the Max Planck Institute for Demographic Research employed a novel statistical technique that is able to separate causes and effects. Using data from the ongoing Health and Retirement Study from the University of Michigan, scientists were able to find evidence for the cognitive benefits of delayed retirement.
They found that “postponed retirement is beneficial in cognitive function for all genders, races/ethnicities, education levels, and regardless of professional or non-professional occupational status.”
Now this doesn’t mean that you absolutely must stay at your job into your 70s or face the consequences. But it should inform your thinking as you plan for the future, freeing you up to ask more “what ifs.” What if you stayed at your current job? What if you transitioned to a second career in something you’ve always wanted to do? What if you could begin a “job” in a volunteer capacity, donating your talents to a nonprofit that couldn’t otherwise afford you.
The point is to realize that continuing to work after retirement age is not a sign of failure. Just the opposite. It turns out that dropping all responsibilities and living every day like it’s the weekend isn’t good for you in the long-term.
If you’re looking for ways to make your retirement healthier and more fulfilling both personally and financially, be sure to talk with your trusted advisor.
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