The Advantages of Waiting to Retire at 70

There are a number of reasons why people should think about delaying retirement past the traditional age of 65. The retirement age of 65 was set in 1935 when Congress enacted Social Security and lifespans were much shorter.

Several things have happened in the decades following 1935 that now makes it reasonable for people to delay retiring until age 70. First, the structure of work has changed. Instead of working on a farm or doing heavy lifting in factories, the typical American worker is physically capable of working longer than 65. For the vast majority of workers, there’s more sitting or standing than manual labor. The second factor is the longer lives that U.S. citizens now enjoy. While not universally true, many people do enjoy their jobs do and prefer to go to work instead of sitting around the house or playing endless rounds of golf.

From the financial perspective, it makes even more sense to work past age 65. Monthly Social Security checks increase by 76% just by waiting until age 70 to retire instead of collecting at age 62 (the first year of eligibility) –76%!

As people get older and advance in their careers, their salary often increases with their tenure, meaning that if they leave at age 65, they could be leaving during their peak earning years. By continuing to work they can continue to add to their retirement savings. This is important for people with pensions whose retirement benefits continue to grow the longer they work. And it becomes even more important for people whose retirement is self-funded by their 401(k) plan, IRA or other investment portfolios.

Finally, from a purely actuarial perspective, the longer we work and bring in income, the less time we will spend fully retired and withdrawing from our retirement savings. The greatest fear that people have is running out of money during retirement. Delaying retirement until age 70 or beyond reduces that possibility.

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