In part two of our study if it makes sense to stay working in order to increase your retirement income, here we dive WAY in the deep end in order to show you why you should NOT!
According to Shoven et al, the number 1 aspect of increasing retirement income is increasing your Social Security benefits. Nothing comes even close.
In fact, even with rates of return around 10% a year on your portfolio over your ENTIRE working career of 30 yrs, Social Security is still the primary determination in how to increase your retirement income.
Returns of 3-6% annually, over your ntire working career, makes Social Security 83% of the increase you could see in your retirement increase.
The rest comes from additional assets accumulated by working another year and increasing your annuity income because you age.
Those two things account for 17% of the increase in your retirement income by working another year. SOcial Securithy increase accounts for 83%!
So, if working an extra year doesn’t give you much more income in any other aspect other than Social Security, what’s the point of working longer???
Just defer Social Security and you’ll obtain 80-85% of the same benefits as you would by working an extra year!
This paper concludes retiring and taking Social Security are one in the same. But they’re not. You can easily retire early and yet defer taking Social Security to get most of the benefits you’d receive by working an extra few years.
So, if you’re hating your crappy, old job but worried about leaving retirement income on the table, remember the primary way to increase retirement income is simply to defer Social Security. Nothing else comes close.
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