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The Benefits of Delayed Retirement

delayed retirement

If you’re among the many seniors who plan to retire soon, you may want to consider the benefits of delayed retirement. Barring health issues, delaying retirement can entitle one to greater benefits. So, if you plan to retire soon, make an assessment first. See if early retirement benefits outweigh those that you could possibly receive if you work for a few years more. This article lists a few of the many benefits that you can get if only you delay your retirement. 

What are the Benefits of Delayed Retirement?

Your healthcare benefits will continue. 

The benefits you get on top of your salary are important to those who choose to work into their 60s. Think about the benefits you get in addition to your regular salary. Some of these include employer-paid life insurance. Add in your employer’s contributions to 401k. Not to mention your health insurance which is more likely to provide a wider scope of coverage. 

Whether you want your employer to continue paying for your health coverage may depend on the the size of the company that you’re working for. Once you reach the age of 65, you become qualified for Medicare Part A. This entitles you to inpatient hospital services. And, since Part A is free, you may have the option not to enroll. But, you can enroll in Medicare Part B which covers your doctor visits.

You may also enroll in Medicare Part D to gain coverage for your prescription drugs. If the company you’re working for has less than 20 number of employees, you have to sign up for Medicare. This will serve as your primary insurance. You must do this even when your employer also has its own coverage.

If you refuse to sign up for Medicare, you run the risk of not being covered at all. It is also important that you discuss your health insurance options with your employer. But, if you are working in a company that has 20 or more number of employees, employer-based coverage will serve as your primary insurance. You also have the option to stick to that insurance if you want. And, once you retire you may sign up for Part B and other types of coverage. You can do this without the risk of incurring penalties. 

But, for those who decide on retiring soon, giving up their employer-provided health care benefits can be costly. Not to mention the fact that you might need to look for another doctor. This can pose a real issue especially if you are diagnosed with a chronic condition.

Although you may still be able to keep your COBRA coverage, but this can also be costly without your employer subsidizing the premiums. Add in the risk of losing other employee perks such as disability-insurance coverage. So, before you think about handing in your retirement documents know what benefits you are giving up. Before you retire, do a comparison-shop first to see if you can still have the same benefits without the need to break the bank. 

You will receive bigger pension.

Pensions are not just calculated based on your pay. But, part of it would also include years of service. The amount of pension you receive may depend on the amount of your average earnings for the last five years. Some plans base your pension on the average earnings you had all throughout the years since you signed up for it. But, generally if your income increased then you will most likely expect a bigger pension. 

For seniors who are receiving pension from the Federal Employee Retirement System or FERS, their pension will be based on the number of creditable years of service. If you retire earlier and your years of service do not reach 20 years, your benefit will be less 5 percent. But, if you extend your working years and resign at 62 years old to make your years of service total to 20 years, your pension multiplier will be 1.1 percent, instead of just 1 percent.

Your pension income will significantly increase because of the extra number of years rendered in service. Plus, the higher pension multiplier. 

You’ll have more retirement savings.

Retirement planning experts suggest that people must save enough for retirement. The amount they save should be enough to last for at least twenty five years. If you think you haven’t saved enough, then working longer will be your best option. One advantage of it is that you will have fewer years to rely solely on your retirement savings. Besides, it would also mean more money is going to your retirement nest egg. If you will be working for another one year, you will have greater compound interest and more tax-free savings.

If you’re 50 years old or older, you will be qualified to invest more in your 401k. You can also invest more in your individual retirement accounts. These catch-up contributions can raise your maximum contributions for up to $6,000.Your IRA contribution can also be increased for as much as $1,000. 

You will have more from your social security benefits.

For every year that you delay claiming your social security benefit, you will be entitled to an 8 percent increase in your benefit. To be able to get more from your social security benefit, wait until your 70. In other words, more years of working would also mean more benefits flowing. If you work a few years more, your social security benefits will become higher. Your full retirement age will be determined based on the year you were born. Seniors born between 1943-1954, will have 66 as their full retirement age.

Those who were born past 1960s their full retirement age will be 67 years old. So, if you decide to retire years before your full retirement age, your social security benefits will be less 30 percent. But, if you work for moe years and retire past your full retirement age your benefits will also increase. The increase will be 8 percent more for each full year past your retirement age.

So, if you decide to retire at age 70, your benefits will be 132 percent more compared to when you retire at age 62. In other words, delaying your retirement would mean more money that you can enjoy for the rest of your life. 

Working a job keeps your mind stimulated.

Keeping your mind engaged on a regular basis will greatly spare you from the risks of dementia. Work gives seniors more chances of keeping their brains stimulated. Whether it’s about writing reports or processing company products, these things surely benefit a senior’s brain in more ways than one. 

A French study was conducted which had self-employed workers as participants. The results suggest that delaying retirement helped reduce their risk for dementia. 

A separate 2010 study was conducted which looked into the data gathered from England, U.S. and 11 countries in Europe. The researchers concluded that retirement has adverse impacts on the cognitive ability among seniors. The researchers speculate that this could be due to the fact that being retired means less exposure to stimulating environment. 

So, if you think your retirement days won’t be as productive as you are now while you’re working, better postpone it. 

It is easier for you to remain physically active.

Working in your 60s will provide you plenty of opportunities to remain physically active. Performing daily routines will help you stay active. Getting yourself prepared every morning will allow you to become active the moment you wake up. Walking your way to the parking is a chance for you to get a bit of physical exercise.  On the contrary, being retired will deprive you of these daily opportunities to be active.In retirement, you will most likely have more time to just sit on the couch and watch TV. 

You will be able to maintain your social connections.

Keep in mind that once you retire, you will no longer be invited to business meetings. Except in rare cases such as company anniversaries that aim to award their previous best employees. Working will also give you opportunities every day to chat with your colleagues. Just think about those afternoon lunches or snack times spent with colleagues in the company cafeteria. You will no longer have these opportunities for socialization once you retire. 

You will have more challenges to work with.

Retirement years can get too boring especially if you haven’t planned anything before you left your job. Many retirees admit to missing the challenges in the workplace. This is why many retirees also choose to find a new job in retirement. Having a job enables one to have a set of tasks that need to be accomplished.

The best thing about it is that in the workplace celebrations are held for every goal accomplished. Besides, setting one’s own goals at work provides a lot of motivation to the senior. This makes life more meaningful for them. 

Things to Keep in Mind When Switching Careers in Your 60s

Be prepared for a pay cut.

Don’t be surprised to find out you will be paid less than what you used to receive in your former workplace. Since it is a completely new job, it would mean you need to start all over again. So, your pay will also start at a rate that new employees normally receive.

One way to prepare yourself for this pay cut is to start cutting debts years before your planned career switch. Make sure that before you make that switch, you are already financially fit. Otherwise, you run the risk of suffering from severe financial woes in your retirement. Another thing to keep in idn is to choose a new career that gives more meaning to your life even if it does not give you more money compared to your previous job. 

Update your knowledge and skills.

Before you make that career switch, make sure that you have taken advantage of your current employer’s training and education programs. This will not only help update your knowledge and skills. You may also choose to enroll in distance learning programs online that let you earn a certificate at the end of the course.

Some of these online courses are free and you just have to pay once you request for a certificate. It will also make your resumé more attractive to your future employer. 

If you want to enroll in free online courses , check out Class Central for more courses designed for the elderly. 

You can also visit Center for Online Education to see what college courses they have  for senior citizens like you. 

When choosing any course  to take up, make sure it is the one that is aligned with your field of interest. The course you choose must also be something that enhances your stock knowledge  about a particular subject you are most interested about. And, don’t forget to check out the skills and education required by your next potential employer. This is to ensure that the course you take up will be deemed valuable to the company that you plan to work for after retirement. 

Whatever course you choose, always remember that you are never too old to learn something new!

Keep in mind that it’s NOT all about money.

If your prospective employer offers a lower pay, find ways to make things better for you. How about arranging the possibility of telecommuting? Can you ask for more vacation days? Is it okay to bring your dog at work?These may seem trivial to a younger employee. But, to a senior, bringing a dog to work or telecommuting could really mean a lot!

Know what benefits are most important to you.

When applying for a new job, you should determine which benefits are the most important to you. Is it the health care benefits? Or, more paid vacation days? If your spouse has your health care covered, then vacation days would be more important. You can then tell your employer about this and try to bargain. If not, look for other jobs that give you the benefit you badly need.