The Congressional Budget Office projects that Social Security will become insolvent in 2029, requiring steep tax increases or benefit cuts. Meanwhile, many Americans are concerned that they might not have enough money for retirement. A simple way to help solve both problems is to delay retirement and work longer.
A person who puts off claiming Social Security from age 62 to 65 increases his benefits by about 24%. A longer work life also means a healthier IRA or 401(k). Researchers at the Urban Institute calculate that an additional five years in the labor force typically raises retirement income by roughly 60%.
But is delaying retirement really possible? Yes, the evidence suggests. From October 2007 to February 2009 the S&P 500 stock index fell by 53%, while the Case-Shiller index of housing prices declined by 18%. Near-retirees reacted to these financial losses by working more.
Read the full article at The Wall Street Journal here.
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