Monday, May 21, 2012

Postponing Retirement

I work with a lot of people who are in their 60s and 70s who could retire but do not.  After working for the company 25 years and attaining at least 55 years of age, a worker can retire with a pension.  Yet they don't leave.  One woman explained to me that the pension is not enough for her to survive.

"You could get another job and still collect the pension," I ventured.  "You would probably be taking in more money that way than you do now."

"No," she replied, "There's no way I could find another job where I do nothing."

That sums it up, folks.


If you continue working, you slightly increase your pension by a small percentage for each year of continued employment.  The problem is that you could be collecting that pension money for not working at all.  By not retiring, employees increase the yearly pension by a thousand, maybe, but they lose $25-$50,000 each year.  When they finally do retire and start collecting a pension, they need to live a certain number of years before the delayed benefit "breaks even."  See this link by Schwab for an explanation of this calculation using Social Security benefits.

I don't know if I will last 24 more years at this place and what my situation will be at that time, if I can make it.

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