Retirement Sooner Versus Later

If you aren’t planning to retire at 65, you aren’t alone. According to the Bureau of Labor Statistics, 18.5 percent of people 65 and older were still working in 2012. That’s up nearly 8 percentage points from 1985.

Some may choose to work past 65 because they enjoy what they do and they value the social engagement of a workplace. Yet others need to work past 65 for financial reasons. Here are a few reasons why you may decide to work into your golden years.

Building a Bigger Retirement Nest Egg

Many 60-somethings simply can’t afford to stop working. In some cases, they didn’t save enough money to retire. In other instances, the recession negatively impacted their employment, investments, and home values, all of which were intended to boost their retirement nest egg.

The longer you stay employed, the less you need to draw on savings and investments and the more you will be able to build a bigger nest egg. The Regions retirement calculator gives a quick picture of how long your savings may last, depending on the amount you start with and the amount you will need to spend each year once you retire.

Managing Remaining Debt in Retirement

Medical expenses can gobble up budgets. Employment can bridge the insurance gap until Medicare becomes available at 65. But even then, the program does not fully cover health expenses.

Plus, many people considering retirement are still paying off debts, whether for credit cards, personal loans, mortgages, or home equity loans. Continuing to work until these debts are paid off can help increase the lifespan of retirement savings.

Inflation has an impact as well. Although many prices have remained stable in recent years, healthcare and education costs keep rising. Families may be stuck with debts related to funding their children’s college education, as well as health care costs that were not covered by insurance.


Higher Retirement Income

The longer you wait to claim Social Security, the bigger your checks will be. As a rule of thumb, each year you continue working after age 65 increases your benefit by 8 percent. Although few people wait to age 70, those who do receive 132 percent of their full retirement age amount, according to the Government Accountability Office.

Private pension plans may offer less security than in the past, with most having been converted from a “defined benefit” to a “defined contribution.” In other words, many private sector employees are no longer guaranteed a specific amount payable on retirement, but will depend on how well investments in the plan perform.  As such, it may make sense to keep contributing and monitoring how well the investments in the plan are performing.

Longer Lifespans

People tend to underestimate their own longevity. One British actuarial firm claims that working longer may lengthen life spans. Actuaries at the consultancy Club Vita found that retiring at 70, not 60, on average can add 13 months to the male lifespan and 12 months to the female lifespan.

Each person faces a unique situation, so it’s important to analyze your personal finances and your personal situation before deciding whether it’s the right time to retire. If you’d like to speak with someone about your retirement planning, contact a Regions banker near you.


This communication is provided for educational and general marketing purposes only and should not be construed as a recommendation or suggestion as to the advisability of acquiring, holding or disposing of a particular investment, nor should it be construed as a suggestion or indication that the particular investment or investment course of action described herein is appropriate for any specific retirement investor. In providing this communication, Regions is not undertaking to provide impartial investment advice or to give advice in a fiduciary capacity.

This information should not be relied on or interpreted as accounting, financial planning, legal or tax advice. Regions encourages you to consult a professional concerning your specific situation and visit for current tax rules.