Why Would You Choose to Work Longer?
When deciding when to retire, financial factors are the most common motivation to work longer. Deciding to Work longer can help you achieve most of your financial goals, have more money in your retirement, and do all the things on your bucket list without having to worry about finance.
If you have nothing, or very little saved for retirement, and are relying on social security, working longer is a way to support yourself until you are able to access your social security. Delaying retirement could also be a way to delay accessing your savings, ensuring that it will last longer during retirement.
This also is an opportunity to start living on less, especially if social security will not be able to maintain your current lifestyle. The behavioral change of living on significantly less can be a very difficult adjustment. Making immediate adjustments in your spending can be useful to ascertain whether you will be able to live on much less while you are still working. This allows you to prepare for a different lifestyle and save aggressively, even at this late stage.
Why Would You Work Longer If You’re Financially Prepared?
Assuming you’ve solved the financial aspect of your retirement, you may be inclined to keep working for other reasons. One motivating factor may be the impact you have on the people you work with. Loving your job is another reason to keep working, as is feeling an obligation to the organisation or team, and being an integral part of a project that you have been working on for a long time.
Having nothing to retire to and a lack of social relationships outside of work can be a source of anxiety for many and a factor in delaying retirement.
Reasons to Retire Now
Assuming you’re financially ready; retiring earlier could hold a multitude of benefits. Most salient is the ability to do things you either couldn’t do, or couldn’t do well, while working.
The extra time is an opportunity to start a business you’ve always wanted to, pursue a passion project and volunteer for causes you’ve always wanted to support. Having something to accomplish can be a particularly motivating factor for early retirement.
If you’re unhappy at work or don’t like your job, retiring earlier allows you to use that time for travel and or spending the time with elderly parents and grandchildren. Earlier retirement gives you more time to do things you may have wanted to do and allows you to take more chances and make more mistakes.
Health and Life Expectancy
Life expectancy over the past 100 years has sky-rocketed. Having something to retire and having a bigger nest egg has become vital when we may yet live for a few decades in retirement.
Health can be a reason to retire or keep working. If you have a shorter life expectancy, that might be a reason to retire sooner. Conversely, health care may be a reason you decide to work longer, prolonging your company-based coverage until medicare kicks in.
A longer life expectancy may still be accompanied by physical impediments that may be exacerbated by the physical and mental stresses of work. Retiring sooner may be the better option if you know you may not have all your physical capacities for much longer, and allow you to enjoy your retirement a bit more.
When timing your retirement, the influencing factors and accompanying decisions are not always clear-cut. There may be reasons in favour of both choices, and the decision you make often has ramifications for the people you leave behind. In these cases, you may have to create new options to fulfil your specific needs to find the best transition into retirement.
