1: It literally pays to work, and MONEY can buy peace of mind
Working longer gives you greater flexibility. The most overlooked benefit of working later in life is the financial flexibility it offers. This can be a huge benefit for boomers, who not only are living longer these days but face competing financial obligations. Many boomers have had children later in life than their parents did, so some are redirecting retirement money to pay college tuition. A few extra years of work can certainly help restock those retirement accounts. What's more, many boomers have seen those kids come home to live after college. Since the start of this decade, the number of adult children living with Mom or Dad has jumped 70 percent. This adds an extra financial burden to workers when they need it the least.
Perhaps the biggest reason it pays to work longer is that staying in the workforce helps you better time an appropriate exit. If you don't believe timing matters, "just ask the last wave of retirees who left the workforce in the bear market," says Ivory Johnson, director of financial planning at the Scarborough Group. Consider: If you retired during the down market of 2002 with $500,000 in your nest egg, and you withdrew 7 percent of your 401(k) and IRAs to cover basic living expenses, you would have been left with only around $360,000 by the start of your second year of retirement in 2003. But had you waited two years for the market to recover and grow, and then withdrawn 7 percent of your account in 2005, you'd have had more than $542,000 in your account by your second year.
The bottom line: The first few years of retirement are the most critical in preserving your nest egg. Yet the only way individuals can truly safeguard their savings is to be willing to work through choppy times in the investment markets. The good news is, many older workers today are more than happy to do just that.
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