Is This the Best Way for Older Workers to Pad Their Nest Eggs?

Senior African American couple at home
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It’s probably not what any of us want to hear, but delaying retirement may be your best bet for boosting the power of you nest egg.

Researched released earlier this year from the nonprofit National Bureau of Economic Research describes working longer as “a powerful method to increase retirement standard of living.” Researchers found that working longer can have an even greater impact than alternatives such as saving more money.

This is not to say you necessarily need to delay retirement for years, however. In some cases, delaying retirement by mere months can significantly benefit your nest egg. This is especially true for older folks, the research shows.

General benefits

The benefits of postponing retirement, according to researchers, include that it allows you to:

  • Delay claiming Social Security benefits, which means you will receive more in monthly benefits when you do claim them.
  • Make more contributions to your retirement accounts.
  • Delay withdrawing money from your retirement accounts, which means the account balances can compound for a longer time before you start tapping them.
  • Delay buying an annuity, which means the monthly annuity payments will be larger.

Older workers benefit more

The researchers, from universities and other institutions, looked at various types of households for their analysis, and worked under the assumption that workers start claiming Social Security benefits “upon retirement.” According to the authors:

The basic result is that delaying retirement by 3-6 months has the same impact on the retirement standard of living as saving an additional one-percentage point of labor earnings for 30 years.

Of course, you don’t have to choose between saving more and working more. If you’re concerned about funding your golden years, take every reasonable step to boost your nest egg. For specifics, check out:

How do you feel about delaying retirement as a way to improve your standard of living in retirement? Would you consider working longer? Share your thoughts below or over on our Facebook page.

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