Delaying Retirement Due to Stock Market Turbulence? 3 Benefits You Might Reap

Although the stock market has been volatile since the start of the year, the past month has been particularly brutal. In fact, many people’s portfolios are down 20% or more for the year, and at this point, it’s hard to say when the market is going to rebound.

If you’re many years away from retirement, this recent bout of turbulence may not be such a problem. But if you’re close to retirement, you may now be rethinking your plans to leave the workforce in light of the current state of the market.

At first, delaying retirement may not seem like a route you want to take. But there are actually several benefits you might enjoy if you wind up postponing your workforce exit by a few years. Here are a few to consider if you’re unsure you should move forward with retirement in the near term.

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1. Higher Social Security benefits

Delaying retirement could mean delaying Social Security as well. And that means snagging a higher monthly benefit for life.

You can sign up for Social Security as early as age 62, and you’re entitled to your full monthly benefit at full retirement age, which will kick in four to five years later, depending on your year of birth. If you don’t claim Social Security before full retirement age, you’ll avoid a reduction in benefits. And if you delay your filing beyond full retirement age, you can boost your benefits by 8% a year, up until age 70.

2. A more robust nest egg

Working a few more years could make it possible to pad your IRA or 401(k) plan. The result? More money for you to spend and enjoy in retirement.

3. A nest egg that lasts longer

The sooner you retire, the longer you’ll need your existing savings to last. But if you extend your time in the workforce, you should, in theory, have the option to leave your savings alone for a few more years.

Doing so could be your ticket to riding out this wave of stock market turbulence and avoiding losses in your portfolio. It could also allow your existing investments to keep growing and gaining value.

Plus, think about it this way. Say you were planning to retire at age 67 and you live until age 92. That’s 25 years of expenses your savings will need to cover. If you delay your retirement until age 70, it takes a little bit of pressure off your nest egg, making it less likely that you’ll end up running out of personal savings later in life.

Look at the silver lining

Having to postpone retirement due to stock market conditions may seem like a harsh blow. But if you do end up having to go that route, try to look at the bright side.

Delaying retirement gives you an opportunity to snag higher Social Security benefits, boost your savings, and stretch your nest egg. And any of those things individually could set the stage for a more financially secure ride during your senior years.