Like many things that evolve, the 65-year-old retirement age is becoming obsolete. The origins of this choice date back to Germany in 1889. At that time, the average life expectancy in the U.S. was less than 50 years. By the time Social Security became a regular part of citizenship in 1935, this number had risen to 61, and it's projected to reach as high as 89 within the next 50 years.
With a longer lifespan comes a choice: retire at 65 and chance a few decades of living without a paycheck, or keep working. Both options come with advantages and disadvantages, and there's no wrong or right answer. Here, we'll discuss the pros and cons of working past 65 to help you decide which path to take.
Is a Longer Career For You? The Pros to Consider
For most people, the decision to work past 65 is influenced by two key factors: health and finances. If you're not pushed into retirement because of your health or forced to work longer because of your bills, then you can look objectively at the advantages of staying in the workforce longer.
Financial Pros
Of course, the most obvious benefit is financial. The longer you work, the more money you can contribute to your retirement accounts and pay off debt. This increases the amount you'll be able to live on when you do stop working.
Waiting to retire can also increase your Social Security benefits. By delaying collecting until 67 or later, your monthly payment could be higher than if you choose to retire sooner.
Working with a wealth management advisor, like OJM Group, can help you understand how much you'll need to have available to continue your current standard of living when you're not bringing in a steady paycheck. This step can be eye-opening, providing a clearer understanding of whether you're ready to retire or not.
Health Benefits
Retirement can be dangerous if you don't have a plan to stay active and socially connected. Without mental and physical stimulation, it's common for overall health to decline.
Before you decide to retire, consider how you'll keep your mind sharp and your body in shape. Do you have a social network to keep you connected and avoid isolation? What will you do to feel fulfilled and purposeful in life? If you know you have enough to do to keep your time filled and you're looking forward to having this stage of life to spend on your passions, retirement can be just as enjoyable as, if not more so than, your working years.
A mix of financial and health benefits also offers the opportunity to delay enrolling in Medicare. If your employer provides health insurance, you can keep that and use Medicare as secondary coverage.
Could Retiring at 65 Be Better For You? The Cons of a Delayed Retirement
Sure, 60 is the new 50, but that's only if you're in good health. The longer you work, the more your body is physically and mentally stressed. If your job is physically strenuous or mentally draining, your risk of serious health problems, like cardiovascular disease or stroke, increases.
Your personal life can also be affected by waiting to retire. By now, you may have older children and grandchildren who want to spend time with you, hobbies you've delayed enjoying because of a lack of time, and traveling goals you've put off. The average lifespan is increasing, but no one is promised tomorrow. Do you want to put off this flexible time and take that chance?
One more factor to consider is your profession. With more people working past the usual retirement age, it's common to see older individuals in the workforce. However, if your industry is prone to ageism and discrimination, you may find it challenging to switch careers or advance up the corporate ladder. This discrimination is illegal, but it happens.
Conclusion
Finances, health, and overall satisfaction are crucial to living a happy life. When you retire, all three of these areas are impacted. Whether retiring at 65 is a positive or a negative change depends on your unique circumstances. Think about the pros and cons of working past the typical retirement age, and make an informed decision as to whether you want to stay in the workforce or step back, relax, and enjoy your Golden Years.
