For most of your working life, you've looked forward to the day when you can quit your job and start enjoying retirement. But in recent years, talk of longer life expectancies, uncertain Social Security benefits, declining pension benefits, unknown inflation rates, and low retirement savings made retiring at a relatively young age seem difficult. Then, in the past couple of years, declining investment and home values made it seem even more difficult to retire at any age. More and more people are coming to the conclusion that either retiring later or continuing to work during retirement is necessary.
Working doesn't necessarily mean that you have to stay with your current employer. Rather, many individuals are taking on totally different jobs, which can allow them to try something new, provide more free time by working less, or ensure less stress. Besides the nonfinancial reasons for working, there are several financial reasons:
· You have more time to save. Each additional year you work is an additional year you can continue to save for retirement. Those age 50 and over have additional means for saving, with annual catch-up contributions of $1,000 for individual retirement accounts and $5,500 for 401(k) plans in 2010.
· You shorten your retirement period. The longer you work, the less time you'll spend in retirement, which means you need less money to fund that retirement.
· You can delay Social Security benefits. Each additional year you wait to take Social Security benefits, up to age 70, will permanently increase your monthly benefit.
· You keep health insurance benefits. One of the most significant costs in retirement is health care, and you can delay that cost by working at a job that provides this benefit.