Reasons to Delay Retirement | New York Life (2024)

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Reasons to Delay Retirement | New York Life? ›

You can delay Social Security for a bigger payout

For example, those with a full retirement age of 67 could boost their monthly benefit by 24 percent if they waited until age 70. Delaying Social Security means you'll need to make up for that potentially lost income.

You can delay Social Security for a bigger payout

For example, those with a full retirement age of 67 could boost their monthly benefit by 24 percent if they waited until age 70. Delaying Social Security means you'll need to make up for that potentially lost income.

With age inevitably comes declining health and reduced physical and mental capacity to enjoy life. If you dreamed of starting a business, you'll have less time to work on it and grow it. If you plan to age at home, the older you get, the harder home maintenance will become.

The literature on the relationship between retirement age and longevity is still developing. The findings are mixed. Most research shows that delayed retirement helps reduce mortality.

If you start receiving benefits at age 66 you get 100 percent of your monthly benefit. If you delay receiving retirement benefits until after your full retirement age, your monthly benefit continues to increase.

But a deferred retirement is whenever you're not eligible for an immediate benefit. So, it might be an employee 42 years old is has 15 years of service, and they can either defer their retirement to their MRA and take the age reduction or defer it until they're 62 and get no age reduction.

A deferred annuity is one where an employee has at least 5 years of service but isn't old enough to retire. If they leave government with at least 5 but fewer than 20 years of service and don't ask for a refund of their retirement contributions, they can apply for a deferred retirement benefit at age 62.

Your Social Security benefits will be smaller

If you were born in 1960 or later, for example, and you start taking benefits at age 62, the earliest age at which you're eligible, your monthly benefits will be 30% less than if you wait until age 67, which Social Security refers to as your "full retirement age."

Social Security retirement benefits are increased by a certain percentage for each month you delay starting your benefits beyond full retirement age. The benefit increase stops when you reach age 70.

When asked when they plan to retire, most people say between 65 and 67. But according to a Gallup survey the average age that people actually retire is 61.

At what age do most people retire? ›

While the average retirement age for workers in the United States is 64, that number varies as a result of many factors, including your Social Security benefit, your retirement savings, any pensions you might have, and even the lifestyle you want to live in retirement.

For people working in knowledge-based jobs, a retirement age in the 70s is reasonable from a cognitive perspective, too, said Lisa Renzi-Hammond, director of the Institute of Gerontology at the University of Georgia. “Our cognitive faculties we're able to maintain, usually, pretty well into our 70s,” she said.

According to their table, for instance, the average remaining lifespan for a 65-year-old woman is 19.66 years, reaching 84.66 years old in total. The remaining lifespan for a 65-year-old man is 16.94 years, reaching 81.94 years in total.

You need cash now. With the rising cost of living, you may decide to claim your Social Security benefits early. From 2008 to 2009, nearly 36% of eligible men and 39% of eligible women started claiming benefits at age 62 for one simple reason — to pay the bills.

• If you become disabled before your full retirement age, you might qualify for Social Security disability benefits. You must have worked and paid Social Security taxes in five of the last 10 years.

New research evidence bolsters that recommendation. Delaying Social Security benefits to age 70 instead of 62 increases monthly benefits by 77% in inflation-adjusted terms, according to a new paper in the Journal of Financial Planning by Wade Pfau and Steve Parrish.

If you are already entitled to benefits, you may voluntarily suspend retirement benefit payments up to age 70. Your benefits will be suspended beginning the month after you make the request.

The research indicates that a one-year increase in average retirement age results in: An incremental cost of over $50,000 for an individual whose retirement is delayed. 2 This represents the cost differential between the retiring employee and a newly hired employee.

You don't usually have to do anything to delay claiming your State Pension. If you don't claim it, it won't be paid to you. This is unless you're receiving certain benefits before you reach State Pension age. In this case, you'll need to tell the Pension Service that you want to 'defer' taking it.

There is no penalty for taking social security at a different age than full retirement. The size of the benefit is reduced if you take it younger because you get more payments; it is increased if you take it later because you receive fewer payments.