Potential Benefits of Working Longer in Retirement

This document is a guide that discusses the potential benefits and features of working longer before retirement. It outlines how factors such as savings duration, employer contributions, and compounding interest can significantly impact an individual's account balance at retirement. The guide presents a hypothetical example comparing four individuals, all aged 60 with a starting 401(k) balance of $500,000, who plan to retire at different ages. It details how working longer can lead to higher account balances due to increased contributions and extended growth periods. Additionally, the document explains the implications of retirement timing on Social Security benefits and Medicare coverage, emphasizing the importance of these factors in retirement planning. The guide also highlights the retirement income replacement ratio, which measures the percentage of pre-retirement income that will be replaced by retirement income, indicating that delaying retirement can enhance financial stability in later years.