It's no secret that living costs have been soaring since the latter part of 2021. But over the past few months, Americans have really been feeling the crunch. And a recent uptick in gas prices is only making matters exponentially worse.
Consumers are feeling so squeezed by inflation that many are putting off milestones in light of it. For 13% of older Americans, that includes delaying retirement, according to a new survey by the Nationwide Retirement Institute.
If you're nearing retirement age, you may be wondering whether it pays to postpone that stage of life and keep working. Here are a few things you should ask yourself to make that call.
1. Am I happy with my savings?
It may be that you've saved nicely for retirement, but your portfolio has taken a hit due to recent stock market volatility. Or it may be that you shifted toward safer investments in your IRA or 401(k) plan and aren't seeing many losses from recent stock market events, but your total savings balance still leaves you questioning whether your nest egg will suffice.
Either way, if you think your savings could use some work, then it pays to put off retirement — especially at a time when living costs are so high. If you retire soon, you might really drain your nest egg — and land in a scenario where you're facing years of financial woes.
2. Can I still grow my Social Security benefits?
The earliest age you can sign up for Social Security is 62, albeit at a reduced benefit. You're entitled to your full monthly benefit, based on your personal earnings history, once you reach full retirement age, or FRA. FRA is 66, 67, or somewhere in between, depending on when you were born.
You can also delay your filing past FRA and grow your benefits in the process. For each year you hold off until age 70, your benefits increase 8%.
If you're already 70 or nearing that age, your Social Security benefits won't have much or any room for growth. But if you're a few years away from 70, delaying retirement could make it possible to snag a higher monthly Social Security benefit for life — one that could go a long way toward helping you keep up with higher living costs.
3. Am I unhappy at work?
If you detest your job and it causes you a lot of stress, then you may be eager to leave the workforce on schedule. But if you don't mind working, or you get enjoyment from what you do, then you might consider delaying your retirement — especially given the way living costs have risen.
Holding off on retirement doesn't just give you a chance to pad your savings and grow your Social Security benefits. It also makes it possible to leave your existing savings alone for longer.
Unfortunately, we could be in for many more months of rampant inflation. If you're contemplating postponing retirement because of that, you're in good company, so take the time to think things through before making your choice.
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