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Delaying Your Retirement Is A Way to Increase Your Retirement Income

by

Shane Flait

With a substantial loss in retirement savings, many about-to-retire boomers feel they have to keep working to make up for those lost savings. But regaining their previously projected retirement income may not be as hard as they think. Here\’s why that\’s so…

Retirement income tracks directly with the amount of savings you have – but only for a given retirement duration. Doubling your savings will double your retirement income if your term of retirement is fixed.

But if you work longer you not only can increase your savings, you\’re also decreasing your retirement term. Unfortunately, we don\’t live forever, so here\’s some of the silver lining for delaying retirement: for the same amount of savings, your retirement income increases the shorter is your retirement term. Incidentally, this is how life annuity income work for a given premium too.

Typically you draw retirement income from your pension, savings, and Social Security benefits. Each one of these offers you a way to increase your retirement income – if you retire later. Your pension and Social Security pay you a life time income – essentially an annuity. You can annuitize your savings for a life time income, too.

*Pension benefits:

Your pension is a fixed income stream beginning at retirement age – it\’s essentially a life annuity. It has a present lump sum value that you can often receive in place of receiving the lifetime income stream. Most companies offer you the lump sum option if you don\’t want their annuity.

If you can work longer at your company so that you can begin your pension later at a higher income, then do so. But if you must retire from your company and take your pension, yet you want to work longer elsewhere, then take the lump sum option and invest it for however longer you want to work. Then you can annuitize it later with increased value -and shorter life expectancy – if when you do decide to retire later.

*Retirement Savings:

Working – and continuing to save – can offset those lost savings. But just working longer without saving more, will allow your savings to pay you more when you do withdraw from it later. Your term of retirement will have decreased.

If you buy an immediate annuity with those savings, your shorter remaining life expectancy will increase your monthly income. Of course if you do add more savings, then that\’s just a higher income you\’ll get too.

Holding off dipping into your savings can allow them to participate in the regrowth of the markets. Now, nothing is for sure, but, historically, the markets always regain their losses and increase. Hopefully a return of the markets will also recharge those savings too – while you wait.

*Social Security:

Social Security actually increases your monthly benefit if you delay taking them. So hold off on it too to bolster your retirement income.

Shane Flait helps you with your financial legal, tax, and retirement goals. Get his FREE report on Managing Your Retirement =>

easyretirementknowhow.com/FreeReportandSignUp.htm

Read his ebook: \’Wise Way to Financial Independence\’ =>

easyretirementknowhow.com/WiseWayGate.htm

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