Earning more and having to build a smaller retirement nest egg can be “a powerful method to increase the retirement standard of living,” according to the study.
Some advisors say they don’t like to disappoint clients by telling them that they still are not ready to retire comfortably. Still, they embrace the logic of the delayed retirement study.
“The numbers can be compelling,” says Hughes, noting it can increase savings but also reduce costs. For instance, he notes that retiring early at age 62 can also trigger higher medical costs since an employer is usually no longer paying medical costs and Medicare might still be three years away.
Still, Hughes emphasizes that each client is unique; some are determined to retire early no matter what the advisor says. Nevertheless, he agrees that a little more work, can, under the right circumstances, make sense.
Another advisor agrees with the study. Still, he and other planning professionals say there is also a middle ground in the “retire or not to retire early” debate.
Anthony Ogorek, a Certified Financial Planner in the suburbs of Buffalo, N.Y., says some people by their late 50s can no longer take the 9 to 5 grind, but haven’t achieved accumulated enough to comfortably retire. Some clients, he warns, start reaching too far by “putting too much pressure on their retirement portfolio.”
Besides sticking it out a few more years in a stressful job or trying to use riskier investments to reach goals, he adds there is another choice.
“Clients,” Ogorek notes, “will sometimes say I can’t continue to do this job at the pace that I am doing it. So one of the things we suggest is, if you had the chance to restructure your responsibilities, would you then be amenable to working longer?”
Ogorek says this is sometimes the best option for those who haven’t saved enough but don’t want full-time work.
“In other words, we would create a job that you are comfortable doing, that person might be willing to do it longer,” Ogorek says. He adds that employers often agree with letting longtime employee cut back. That’s because they don’t lose the employee’s expertise and the employee can work as a mentor to young workers.