Want to Improve Your Retirement? Work Longer.
While everyone knows that we should be saving as much as possible for retirement, we also recognize that this is not always possible. A recent study published by Stanford professor, John Shoven, finds that working longer can be just as effective, if not more so, than saving extra for retirement. Working one additional month could increase a retiree’s standard of living as much as if they had saved an extra 1% per year for the 10 years prior to retirement. Every month a person delays retirement raises this effect. The reason is twofold: first, they are still earning income and saving, and second, they are postponing the draw down of savings. The longer a person is able to work, the better his or her chances are for a comfortable retirement. This does not mean the retiree has to stay at the same job. The Reuters article, “Convince yourself to work longer and your savings will grow,” discusses alternative avenues to maintain earnings, continue saving, and postpone one’s retirement.
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