If your plan is to retire in 2022, you may, at this point, be counting down the days until it’s time to tender your resignation. But while you may have your heart set on retiring in the new year, you may also want to postpone those plans if these factors apply to you.
1. You’re not happy with your savings balance
There’s no specific amount of money that will guarantee you financial security during your senior years. But as a general rule, it’s a good idea to close out your career with about 10 to 12 times your ending salary socked away in a retirement plan. If you’re nowhere close, it could pay to delay your workforce exit and work a bit longer to boost your cash reserves.
Just as importantly, extending your career could make it possible to avoid tapping the savings you’ve accrued to date. The stock market has had a number of strong years, and the mere act of leaving your portfolio alone and letting it grow could improve your financial outlook, even if you don’t manage to add all that much money to your savings.
2. You’re worried your Social Security benefits will fall short
You may have recently checked your Social Security earnings statement and realized that the monthly benefit you’re in line for is less than what you thought it would be. In that case, delaying your retirement could be a good bet, especially if it allows you to hold off on filing for Social Security. For each year you delay your claim past full retirement age, your monthly benefit grows 8%.
Once you lock in a higher Social Security benefit, you’re entitled to that amount for life. And if you have a much younger spouse you expect to outlive you, your higher benefit could result in a higher survivors benefit for the partner you leave behind. That alone is a good reason to delay your retirement, even if you’re reasonably happy with the state of your nest egg.
3. You don’t want to retire in the middle of a pandemic
Many people worry about what they’ll do with their newfound free time once they retire. If that’s a concern of yours, then you may not want to leave the workforce at a time when COVID-19 cases are, unfortunately, still raging nationwide and there’s a newly discovered variant health experts now need to contend with.
Granted, there may be a way for you to enjoy your retirement without taking on added COVID-related risk. But if your initial retirement goals were centered on extensive travel and nightlife, and those aren’t things you’re comfortable doing right now, it pays to keep working a while longer. It’s a better bet than giving up your paycheck only to sit around the house bored.
You may be in a perfectly strong position to retire in the coming year. But if any of the above factors apply to you, delaying that milestone could end up being a much wiser decision.
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