Later-Life Wage Benefits: How Much Can You Gain By Working Longer?

A few extra years on the job can have a powerful effect on your financial well-being in retirement.

Does it pay to keep working later in your career?

New research shows it does, especially for women. Here’s why.

Filling in the zeroes

Your Social Security benefits are calculated using your top 35 years of earnings. Nearly half of women had zeroes in some of those years, meaning they took time off and left the workforce, usually to raise children.

By working later in life, women can replace those “zeroes” with positive earnings, which helps to increase their Social Security benefits.

Significant benefits by delaying Social Security

There’s a second, and more powerful way, that working later in your career can dramatically increase your retirement well-being.

Research carried out by Boston College’s Center for Retirement Research showed that by working until age 70, instead of retiring and claiming Social Security benefits at age 62, women can increase their benefits  by a whopping 88%.

How is that possible?

Women hike benefits 12% on average by earning those late-career wages. They bulk up benefits by an astonishing 76% by delaying from age 62 to age 70. Together, that adds up to a total increase of 88%.

The Takeaway: Even modest working income later in your career can help increase lifelong retirement benefits and make your money go further. If you feel your retirement assets are on the skimpy side, look to supplement your earnings via part-time work and – most importantly – delay taking Social Security.

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