Reasons to delay retirement
Reasons to delay retirement: As 2025 draws to a close, many people are looking forward to welcoming 2026, and for some, that means thinking about finally stepping away from work. But before you hand in your retirement notice, it might be worth taking a closer look at your finances and plans. Experts say that for some Americans, retiring in 2026 may not be the best move just yet, as per The Motley Fool report.
Here are three clear signs you might want to hold off at least for one more year.
For example, if you expect to need $60,000 a year to live comfortably and Social Security covers $24,000, the remaining $36,000 would need to come from your savings, as per The Motely Fool report. To safely support that, you’d want about $900,000 saved.
If you’re falling short, it could be a sign to keep working a little longer. An extra year on the job means more time to build your savings, and it can also help you delay claiming Social Security, which increases your monthly benefit by 8% for every year you wait past full retirement age, as per The Motely Fool report.
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If you’ll be 64 in 2026, retiring now could leave you with a gap in coverage. You might have to rely on COBRA or buy your own Marketplace insurance, both of which can be expensive. That could force you to start dipping into your savings earlier than planned, as per The Motley Fool report.
While Medicare isn’t free, with its own premiums, deductibles, and copays, it’s often far more affordable than paying for private coverage on your own. Waiting until you’re fully eligible could save you thousands in health costs, as per The Motely Fool report.
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If you’re not sure how you’ll spend your days, consider holding off for another year while you figure it out. Try experimenting with new hobbies, volunteering, or even taking on a small side hustle that you enjoy, as per The Motley Fool report. That way, when you do retire, you’ll have a better sense of how to fill your time in a fulfilling way.
If you’re under 65, you won’t qualify for Medicare yet and may have to buy private insurance or continue coverage through COBRA, which can be expensive, as per The Motley Fool report.
Is delaying retirement by one year really worth it?
Yes, even one more year can make a big difference. You’ll have more time to save, keep earning, and possibly increase your future Social Security payments.
Here are three clear signs you might want to hold off at least for one more year.
1. You’re not happy with your savings
There’s no one-size-fits-all number when it comes to retirement savings. But a simple rule of thumb can help you figure out if you’re ready, as per the report. Estimate how much income you’ll need each year, subtract your expected Social Security benefits, and multiply what’s left by 25, as per The Motley Fool report.For example, if you expect to need $60,000 a year to live comfortably and Social Security covers $24,000, the remaining $36,000 would need to come from your savings, as per The Motely Fool report. To safely support that, you’d want about $900,000 saved.
If you’re falling short, it could be a sign to keep working a little longer. An extra year on the job means more time to build your savings, and it can also help you delay claiming Social Security, which increases your monthly benefit by 8% for every year you wait past full retirement age, as per The Motely Fool report.
ALSO READ: The Fed just slashed rates — experts reveal the No.1 place to keep your money right now
2. You’re almost eligible for Medicare, but not quite there
Health care costs can take a big bite out of your retirement income, especially if you’re not yet old enough to qualify for Medicare, which typically begins at age 65, as per the report.If you’ll be 64 in 2026, retiring now could leave you with a gap in coverage. You might have to rely on COBRA or buy your own Marketplace insurance, both of which can be expensive. That could force you to start dipping into your savings earlier than planned, as per The Motley Fool report.
While Medicare isn’t free, with its own premiums, deductibles, and copays, it’s often far more affordable than paying for private coverage on your own. Waiting until you’re fully eligible could save you thousands in health costs, as per The Motely Fool report.
ALSO READ: SoftBank’s $250 billion mistake: How Masayoshi Son sold Nvidia too soon and missed a fortune
3. You don’t have a plan for your time
The idea of endless free time can sound appealing, until the novelty wears off. Many retirees find that without a clear plan or purpose, too much downtime can lead to boredom or frustration, as per The Motley Fool report.If you’re not sure how you’ll spend your days, consider holding off for another year while you figure it out. Try experimenting with new hobbies, volunteering, or even taking on a small side hustle that you enjoy, as per The Motley Fool report. That way, when you do retire, you’ll have a better sense of how to fill your time in a fulfilling way.
FAQs
What happens if I retire before I’m eligible for Medicare?If you’re under 65, you won’t qualify for Medicare yet and may have to buy private insurance or continue coverage through COBRA, which can be expensive, as per The Motley Fool report.
Is delaying retirement by one year really worth it?
Yes, even one more year can make a big difference. You’ll have more time to save, keep earning, and possibly increase your future Social Security payments.
