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By Christine Benz | 05-27-2010 10:00 AM

How Working Longer Pays Off for Retirees

Extending your working life even a handful of years and delaying Social Security can be really beneficial financially, says retirement author Mark Miller.

Christine Benz: Hi, I'm Christine Benz for Can retirees improve their standard of living by working longer or working part time? Here to explore that question with me is Mark Miller. Mark is a retirement specialist and also the author of "The Hard Times Guide to Retirement Security." Mark, congratulations on the book, and thanks so much for being here.

Mark Miller: Thank you. Thanks for the invitation to come in.

Benz: Now, Mark, your book is very holistic, and that's one reason I really like it. You talk about all aspects of retirement planning, including the fact that for a lot of today's retirees, working longer or continuing to work in some capacity is going to be part of the formula that they use. Talk about the benefits of retirees working longer and how that can help improve their standard of living.

Miller: Christine, it sounds like a contradiction terms, right? Retirement and keep working. I hear a lot from readers who say, "Oh, with this recession I'll never be able to retire. I'll have to work until the end." The perspective I have in the book is that's not the case. When we talk about working longer, we're not talking about working forever for most people. There's a lot of evidence suggesting that extending your working life, even a handful of years, can be really, really beneficial financially.

Then it also has some great benefits in terms of health, and state of mind, and all kinds of emotional well being. But just to focus on the money side, there are really several things to think about. One is Social Security.

As probably most of our listeners know, you can file for Social Security when you turn 62. That's the initial age that you are eligible. But the full retirement age for most people coming up to retirement now is about 66. The way that Social Security is structured, you get much more in annual benefits if you wait until your full retirement age.

If you have a reasonable expectation of living long, that increase in the amount that you take home annually will really boost your retirement security over the long haul. When I use the term retirement security, that's how I'm defining it. I'm thinking about it not this year or next, but over a life that might go on another 20, 25 years in retirement.

There's a lot of evidence to suggest that with rising longevity, many of us will be fortunate enough to live long, so you have to be thinking about how do you ensure income over that long haul, so Social Security's a big piece of it.

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