Work longer and enjoy life before full retirement

MONEY POWER: Kiplinger's Personal FinanceMay 25, 2014 

I plan on living at least until 90. That’s not chutzpah talking; it’s heredity. My grandmother lived to age 95, and my mom is going strong at 89. Given that I might have to stretch my retirement savings over 25 years or more, I’ll try to wait past 66, my full retirement age, to claim Social Security benefits. For each year I wait, my benefit will grow by 8 percent until age 70.

But because I can’t live on fumes, I’ll have to find a way to make up for the missing Social Security checks for four years. One obvious solution would be to keep working full-time. I could also receive Social Security based on my former husband’s benefit while postponing my own, then switch to my higher benefit at 70. (For the personalized claiming strategy that would work best for you, visit

If I decide to retire before 70, I’d have to supplement the spousal benefits by working part-time or take more out of my retirement accounts. But wouldn’t taking bigger withdrawals early in retirement mean scraping bottom 25 or 30 years hence? In fact, says William Reichenstein, a principal at Social Security Solutions, the higher Social Security benefit you get by waiting until 70 not only increases your spending power but also allows you to extend your portfolio despite the earlier, bigger withdrawals. “If you have a long life expectancy, it’s the right decision,” he says.

Yet another idea: Keep working and postpone Social Security, but stop saving. This concept, called “practice retirement” by T. Rowe Price, lets you enjoy some of the perks associated with retirement while still pulling in a paycheck.

Granted, you’ll lose some of that money to taxes, assuming you were contributing to a pretax account. But if you were saving the maximum ($23,000 this year in a 401(k) for people 50 and older), you could still free up enough to finance a few nice trips or home improvements. (Hello, hot tub!) You’ll also be delaying Social Security, letting your savings compound and shortening the period during which you’re withdrawing money in retirement.

Of all the possible strategies, the idea of working longer and saving less appeals to me the most. I like my job, so doing it for a few more years isn’t the hardship it would be if I were less fortunate in my career. I’ve been saving my entire adulthood, and I would welcome the chance to splurge a little. If working longer at a job I enjoy also gets me a Mini Cooper or a vacation in Provence, I’d say that’s a pretty good trade-off.

Jane Bennett Clark is a senior editor at Kiplinger’s Personal Finance magazine. Send your questions and comments to And for more on this and similar money topics, visit

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