John, 61, is set for retirement.
He was approved for Social Security, and then, just before he was about to give his notice, was laid off by his employer, an added bonus that meant his severance would cover him until the month his Social Security checks start.
The only catch is that as he’s not yet 65 he’d have to bridge health insurance on his own.
An opportunity then arose that made him reconsider his plans.
John’s employer offered him a team-leading, client-facing role in a department he’s always wanted to join. The pay and benefits are strong.
He’s tempted, but he can’t see himself working beyond the end of the year. He also wonders if it’s fair to take a leadership job he intends to leave soon.
That’s the core of his dilemma. Here’s what else is at stake.
Let’s say John is married. His 60-year-old spouse has been on his employer plan and is two years from Medicare eligibility.
The couple has roughly $1 million saved — about $940,000 in 401(k) and IRAs and $60,000 in cash — with a nearly paid-off mortgage.
Americans believe they need about $1.26 million to retire comfortably in 2025, so John and his wife may be within striking distance even without maximizing Social Security — but are not quite at the “magic number.”
Working longer would obviously boost their retirement savings. However, for John, the new job may be about more than just money.
Many older Americans say work offers more than a bigger retirement pot, access to health insurance and Social Security benefits. Respondents to the University of Michigan’s National Poll on Healthy Aging claimed other important factors include having a sense of purpose, contributing to society, keeping their brain sharp and maintaining social connections.
Taking the job could help John in four ways.
Moreover, if he waits until 70, he’ll earn “delayed retirement credits” of about 8% per year. In other words, the longer he holds off, the more he will get.
