The best way to improve your retirement’s financial picture is to keep on working if you can. Reshma Kapadla writes at Barron’s:
RESIST RETIRING PREMATURELY
Given the health risks created by the pandemic and uncertain outlook for certain industries, early retirement may seem like an attractive option. But advisors recommend that those who are five to 10 years away from retirement should stay in the workforce, if possible.
“The best way to improve retirement financial outcomes is to work longer,” says Jamie Hopkins, director of retirement research at Carson Group. “A year or two before retirement, we see people tighten their belts and reduce spending, but that has minimal impact versus working six months to a year longer.” Indeed, 34% of 50- to 64-year-olds in the Edward Jones/Age Wave survey said that Covid-19 has changed their retirement timeline.
For many Americans, the years right before retirement are those with the highest incomes. Adding a few more of those high-income years has the best chance to positively impact your retirement.
Waiting on retirement can also mean holding off on collecting Social Security, which can be beneficial for many retirees.
Working a few more years before retirement doesn’t have to mean manning the same position you’ve had for thirty years either. You can leave the firm and work for yourself doing what you’re good at, and what you love.
Don’t lose hope. Think strategically. How much stronger can you make your retirement prospects if you work one more year? What about two, or three?
If your retirement security is drastically enhanced by working a couple more years, give yourself the comfort you deserve in retirement by doing so.
Action line: Examine your retirement plan with a professional, and see how many more years you’ll need to work to get the retirement you want.
Originally posted on Your Survival Guy.