First Person: Why I Retired at 70 Instead of 65

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First Person: Why I Retired at 70 Instead of 65

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The author and his wife enjoying their retirement on a cruise.

By the time I was 65, I was ready to end my working career. I'd been with the same company, Prudential Financial Inc., for more than three decades, and involved in daily deadline jobs that got more stressful as the years passed.

Retirement Income Seemed Adequate We considered our combination nest egg savings, pension and social security to be adequate. Even considering inflation, my wife and I figured we could live comfortably. We planned to follow a reasonable post-retirement budget, and we looked forward to our so-called sunset years.

Retirement Income Was Not Adequate Then, just as I was prepared to quit my job, something happened to force me to rethink the entire plan. My 18-year-old child was accepted at an Ivy League university. Although there was a partial scholarship, it would still cost us more than $30,000 a year for tuition and living expenses. They would require at least half of my retirement income, and probably dig deeply into my savings. There was only one decision I could make.

How Working To Age 70 Can Be Advantageous I opted to stay on the job. One big advantage of earning my full annual salary for five more years allowed me to continue with the company participation savings plan. For every 13 percent of my weekly salary I voluntarily put into the interest-bearing plan, the company added another three percent. That meant, along with adding another five years contributing to the plan, with interest, I continued to add as much as another $10,000 annually to the account. It also helped pay a large part of the annual university costs needed for four years.

Company Retirement Plan By extending my total job service from 30 to 35 years, my annual pension at age 70 was increased by at least 10 percent a year. Built into it were bonuses and cost of living adjustments during each of those last five years at work. The continuing maximum income also contributed significantly in paying the ongoing university costs.

Social Security Apparently Uncle Sam wants to encourage people to work beyond age 65, because Social Security benefits are increased from five to eight percent each year it is delayed. For me, that meant when I began receiving monthly SS checks at age 70, they were as much as 40 percent higher than they would have been if I had retired at age 65. Those five added working years not only helped pay for my child's university expenses, increase my pension and add to my savings account. They've also allowed me to enjoy a more financially worry-free retirement.

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