5 health and wealth benefits of delaying retirement

Although many of us enjoy our chosen careers, even those who feel genuinely happy as they set off for work every day secretly dream of retiring, trading in meetings and memos for gardening and grandchildren.

While retiring early can certainly have its benefits — reduced stress, increased personal freedom, more time to spend with family and friends, to name a few — there are some impactful benefits of retiring later that may turn your head.

“Every person’s situation is different, but if you are in good health and enjoy your work, then delaying retirement is a great option to potentially enhance your financial future,” wealth manager Julia Pham says. “For every year that you delay retirement, not only are you not drawing down from your savings, but you also have the opportunity to stock away even more into savings. Aside from the financial benefits, delaying retirement may provide a sense of purpose and provide opportunities for social interaction, which can be crucial for your mental well-being.”

Here are five unexpected benefits, according to financial experts.

■ Greater longevity: “From a longevity literacy perspective, Americans are largely unaware of how long they will live,” notes Sherry Finkel Murphy, founder of Madrina Molly, which provides financial and longevity planning education.

Finkel Murphy points out the life expectancy for a 65-year-old is now 87 years for a woman and 85 years for a man.

“With retirement studies showing that retirement happiness involves maintaining a sense of ‘purpose,’ doing meaningful work, preferably on one’s own terms and schedule, will keep your brain and your body happier,” Finkel Murphy says.

■ More retirement savings: By continuing to work, Pham says, you logically have more time to contribute to retirement savings accounts, such as 401(k)s, IRAs or other investment vehicles. “This can result in a larger nest egg when you do eventually retire,” she says.

■ Delaying withdrawals: Additionally, Pham says, delaying your retirement means you’ll be able to delay your withdrawals, which also means your money will spend more time invested for compound growth.

■ Lower health care costs: Remember that those corporate benefits can offset spending from savings. As Finkel Murphy says, health care is expensive. “Working for health care benefits rather than paying out of pocket, at least until using Medicare (at age 65), is a big plus, financially,” she adds. “I don’t think we appreciate how much health care costs until we are forced to go to the marketplace.”

As Pham concludes, delaying retirement allows you to continue receiving these benefits, which can help reduce your health care expenses in retirement.

■ Bigger Social Security benefit: The longer you wait to claim your Social Security benefit, the bigger it will be, Finkel Murphy points out.

“You will need all of it,” she says. “People don’t understand how their Social Security benefit is calculated. As a result, they give themselves a haircut on the benefit they’ve worked their whole lives to receive. While the age at which a professional will receive 100 percent of their benefit, if they were born in 1960 or later, is 67, there’s as much as a 30 percent penalty for taking it early (62) and a 24 percent bonus for taking it late (70). I’ll take the automatic 8 percent bonus each year (68, 69, 70), thank you.”