The benefits of retiring after 65
Making the decision about when to retire depends on several factors — your personal circumstances, financial needs, personality, and post-retirement plans. For the past several decades, 62 and 65 were the ages people chose for retirement. However, according to a recent survey conducted by the Transamerica Center for Retirement Studies, 55% of women and 53% of men stated that they plan on retiring after 65 or not at all.
If you have a meaningful job or career with a good company, the advantages of working into your 70’s are obvious, especially if you enjoy your job. You’ll be able to continue contributions to your savings as well as benefit from the highest possible Social Security payout. In fact, working even a year or two past age 65 not only gives you more time to save, but it also gives your investments more time to grow and increases your monthly Social Security benefits.
Individuals who are 65 aren’t required to withdraw money from traditional retirement accounts such as IRAs and 401(k)s, so you can continue to defer income tax on your savings and let that money grow for another 5 years until age 70 ½ when distributions are required.
Ultimately, the financial advantages to delaying your retirement can help to shorten the period of your retirement for which you need to pay.
Reasons to stay where you are
In the past, 65 was considered old age, but not so in today’s society. It’s a fact that people are living longer. If you’re a healthy 65-year old, you have many more years ahead of you. The life expectancy in San Diego, on average, is 80.7 years which is almost six months longer than the state of California, as a whole.
If you’re in good health and enjoy your job, why not continue working and increasing your retirement funds? However, there are some important steps you need to consider in order to be successful:
- Prioritize your health: Eat nutritious meals, get regular exercise, and sleep well. Another wise choice is taking advantage of free health screenings when you become eligible for Medicare.
- Keep your job skills up to date and abreast of changes in your industry: Think about taking professional development courses to stay relevant. Consider networking as a way to find better positions or a new job if you have to leave your present position.
- Have a backup plan: continue to contribute to your retirement accounts because your Social Security benefits will not cover all of your financial needs in retirement. Consider a part-time job after 65, if you don’t or can’t continue working in your present position.
Planning for now and later
Living longer often translates into working longer. Whether you want to continue working after 65 or are considering an early retirement, you need to plan for it. Retirement planning should include comprehensive estate planning — how you’re going to pass on your assets to your loved ones as well as planning for your future care.
Contact the San Diego estate planning attorneys at California Living Trusts to schedule a free consultation.