Should You Retire Now or Work a Few More Years?
A retirement plan involves more than investments alone.
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about how the different pieces of your retirement plan can work together.
Key Takeaways:
- A big balance sheet isn't the same as being ready to retire. What matters is whether your income can cover your life for decades once the paychecks stop, more than the size of the number you've piled up.
- Working a few more years can do a surprising amount of good. More saving, more compounding, fewer years of withdrawals, and a bigger Social Security check can each strengthen the plan, sometimes dramatically.
- The honest answer comes from running both paths side by side. Comparing retire-now against work-longer with your actual numbers turns a gut feeling into a decision you can trust.
Should You Retire Now or Work a Few More Years?
You’re in good company if this question is keeping you up at night. In 2025, a record 4.18 million Americans turned 65, more than 11,400 people every single day, the peak of the baby boomer retirement wave.1 And here’s an encouraging twist: boomers are the wealthiest generation in American history, holding more than half of all U.S. household wealth, up from about a fifth back in 1989.2
But here’s the catch that trips people up: a big net worth and steady cash flow are two very different things. A strong-looking balance sheet doesn’t automatically mean you can afford to stop working, and “a few more years” can meaningfully change the retirement you’re able to fund. So instead of guessing, let’s walk through how to actually answer this, by looking at your finances, what working longer buys you, what retiring sooner costs you, and then running both paths side by side.
First, Figure Out Whether Your Finances Can Support Retirement Now
Before you weigh “now versus later,” you need to know whether “now” is even on the table. And the honest truth is that readiness varies wildly. Nearly a third of Americans 55 and older have no retirement savings at all, and about half of those who do have saved less than $100,000.3 Your job is to pin down where you actually stand rather than where the averages sit.
That comes down to two things: how much income your retirement will actually require, and whether your assets can provide it for as long as you’ll need. Let’s take them one at a time.
Calculate What Your Retirement Income Plan Actually Needs
Start with the life you want to fund, then work backward. Add up your expected retirement spending, the essentials plus the lifestyle you’re picturing, then subtract the steady income you’ll have coming in, like Social Security and any pension. What’s left is the gap your portfolio has to fill each year.
In order to make that number honest, build in the costs people love to underestimate: taxes on your withdrawals, healthcare and long-term care, and inflation steadily raising your expenses across a retirement that could run 30 years. A budget that ignores those tends to look a lot cheaper than retirement actually turns out to be.
Test Whether Your Assets Can Support That Need for the Long Haul
Now hold that yearly gap up against what your investable assets can realistically provide. A rough gut check is whether the income you’d need to withdraw stays within a sustainable rate, but the truer test is a projection that runs your plan across a long retirement, through good markets and bad.
So calculate the resulting portfolio income gap: take your annual spending, subtract your dependable income, and see whether your assets can cover the difference, year after year, without running dry too soon or leaving you dangerously exposed to a rough stretch of markets.
If the numbers hold up comfortably, retiring now may be well within reach. If they’re tight, or they only work when everything goes right, that’s a strong signal that a few more years could change the picture, which brings us to the next question.
Understand What Working a Few More Years Can Actually Do
Here’s something worth knowing: you wouldn’t be alone in choosing to keep going. Around 64% of boomers say they’re open to working in some form after retirement.4 And beyond the paycheck, a few extra working years can strengthen your plan in ways that build on each other.
Each additional year works on the plan from several directions at once, adding to what you’ve saved while shortening how long it has to last. In order to see the full effect, it helps to break it into pieces.
How Extra Working Years Strengthen the Plan
A few more years of work does more than you’d think, and the effects stack up:
- Continued earnings: Every year you work is a year your portfolio doesn't have to fund your lifestyle, which takes serious pressure off your savings right when it matters most.
- Additional retirement contributions: More working years mean more time to keep contributing, often including catch-up contributions if you're 50 or older, adding directly to what you'll have to draw on later.
- More time for compounding: Your existing savings get more years to grow before you start withdrawing, and near the end of a long career, even one or two years of growth can be substantial.
- Fewer years of portfolio withdrawals: Delaying retirement shortens the total number of years your money has to stretch, so the same nest egg simply has to cover fewer years of spending.
- Greater pre-retirement flexibility: Extra time lets you pay down debt, build cash reserves, and fine-tune your plan while you still have a paycheck backing you up, which is a much more comfortable position to make changes from.
The Benefits That Can Grow the Longer You Wait
Working longer helps more than your portfolio; it can boost the guaranteed and employer-provided pieces too:
- Social Security: Delaying your claim beyond full retirement age generally increases your monthly Social Security retirement benefit until age 70, resulting in a higher monthly benefit once you begin receiving payments.
- Pension benefits: If you have a pension, more years of service or a higher final salary can increase what it pays, so it's worth checking how your specific formula rewards staying longer.
- Vesting and employer contributions: Another year might vest a retirement match, stock, or other benefit you'd otherwise walk away from, so make sure you're not leaving money on the table by leaving a few months early.
- Health insurance and Medicare timing: Staying on employer health coverage until you're eligible for Medicare at 65 can save you from paying for expensive coverage on your own, which is often a deciding factor for anyone thinking about retiring before 65.
Understand What Changes When You Retire Sooner
Now the other side of the ledger. Retiring sooner is absolutely the right call for plenty of people, more time, better health to enjoy it, freedom to do what you want, and those things carry genuine value. But it does change the financial math, and it’s worth going in with eyes open.
The core shift is this: retire earlier and your money has to do more work over more years, while having less time to grow. That raises a few specific risks worth understanding.
The Risks That Grow When You Retire Earlier
An earlier retirement stretches your portfolio in ways that deserve a close look:
- Sequence-of-returns risk: Retiring into a rough market early on, while you're withdrawing, can do lasting damage, because selling investments after they've dropped locks in losses you can't fully recover from. The earlier you start drawing down, the more this matters.
- A longer withdrawal period: Retiring at 60 instead of 65 can mean funding an extra five years or more, which is a meaningfully bigger demand on the same pile of savings.
- Inflation and longevity exposure: More retirement years means more time for rising prices to erode your purchasing power, and a greater chance of living well into your 90s, when you'll still need income.
- Liquidity needs: Retiring before 65 usually means bridging your own health insurance until Medicare, and possibly waiting to claim Social Security, so you need enough accessible money to cover that gap without straining the plan.
- Portfolio allocation: An earlier, longer retirement often means you still need meaningful growth in your portfolio, which has to be balanced against keeping enough stability to weather early downturns, a trickier balance the sooner you retire.
Retirement Timing Also Reshapes Your Taxes and Withdrawals
When you retire changes more than your income, it reshapes your whole tax picture. The years after you stop working but before Social Security and required withdrawals kick in are often your lowest-income years, and that’s a genuine opportunity.
Retiring sooner can hand you more of those low-tax years to work with, room to do things like Roth conversions or strategic withdrawals at lower rates, potentially trimming your lifetime tax bill. Working longer shrinks that window, but replaces it with more earned income and bigger benefits.
Neither is automatically better. The point is that your retirement date sets up your tax situation for years, so it’s worth weighing the whole picture, income, taxes, benefits, and withdrawals together, rather than deciding on any single piece.
Run the Retire-Now and Work-Longer Scenarios Side by Side
Here’s where it all comes together, and where a gut feeling turns into a clear answer. The most useful thing you can do is model both paths with your actual numbers and compare them directly, at the same future date. A good side-by-side comparison looks at more than one number:
- Compare how much each scenario needs to pull from your portfolio during retirement, since working longer usually means withdrawing less, for fewer years, which eases the strain.
- Compare more than the projected ending balance. Look at how likely each plan is to last, how it holds up in a bad market, and how much cushion it leaves you.
- Line up the guaranteed income, your Social Security and any pension, under each start date, since delaying can raise those checks noticeably.
- Weigh the tradeoffs that don't show up in a spreadsheet: your health, how much you enjoy your work, time with family, and what you actually want this next chapter to look like.
- Stress-test both paths against the same what-ifs, a market drop, higher inflation, a longer life, so you can see which plan holds up better when things don't go perfectly.
- Use the comparison to find your options. Sometimes a middle path, like part-time work or a partial retirement, gives you much of the upside of both.
Please Note: This decision isn’t only about the math. The right answer also depends on your health, your energy, how much you enjoy your work, and what you want your time to look like, factors no projection can fully capture.
Retire Now or Work a Few More Years FAQs
1. Is it better to keep working or retire?
There’s no universal answer; it depends entirely on your finances, health, and what you want your life to look like. Financially, working longer can strengthen several aspects of a retirement plan, but that has to be weighed against your health, your enjoyment of work, and the value of your time. The best move is to compare both paths with your own numbers.
2. How do I know if I can afford to retire now?
Add up the income your retirement will require, subtract your dependable income like Social Security and any pension, and see whether your assets can cover the gap for decades, after taxes, healthcare, and inflation. If a projection shows it holding up through good markets and bad, retiring now may be within reach.
3. How much can working a few more years improve retirement readiness?
Often a surprising amount, because the benefits compound. You save more, your investments grow longer, you withdraw for fewer years, and your Social Security and pension can grow, all at once. For someone whose numbers are borderline, even two or three more years can be the difference between tight and comfortable.
4. Does working longer increase Social Security benefits?
It can, in two ways. Delaying your claim raises your monthly benefit up to age 70, and additional high-earning years can replace lower-earning ones in your benefit calculation. Working longer also makes it easier to afford waiting to claim, which locks in a bigger check for life.
5. What is considered the best month to retire?
There’s no single best month, but timing can matter for taxes, benefits, and employer perks. The timing of retirement can affect taxable income for the year, as well as the timing of bonuses, vesting, pension benefits, and other employer benefits.. The right month depends on your specific situation.
6. Is it better to retire on your birthday or at the end of the year?
It depends on how your benefits and finances line up. Some retirement, pension, and Social Security rules hinge on your age or birthday, while tax planning, bonuses, and vesting often line up with the calendar year. It’s worth checking how your specific benefits and taxes interact before picking a date.
Get Help Deciding Whether to Retire Now or Work Longer
So the honest answer to whether you should retire now or work a few more years is that it depends on your numbers, and the only way to know is to see them laid out. Once you understand what your retirement needs, what a few more years would add, what retiring sooner would cost, and how the two paths compare, the decision stops feeling like a leap of faith.
That’s the work we do at Goldstone. We can pin down what your retirement will actually cost, test whether your assets can support it, and model retire-now against work-longer side by side, so you can see the tradeoffs clearly instead of guessing at them.
And because this is as much about your life as your spreadsheet, we help you weigh the financial picture alongside your health, your goals, and what you want this next chapter to be. If you’d like a clear, numbers-based answer to your own retire-now-or-work-longer question, schedule a complimentary retirement review with our team.
Resources:
1) Small Business Association of Michigan: The Retirement Wave Reshaping the Labor Market
2)Federal Reserve: Distributional Financial Accounts
3) Yahoo Finance: Baby Boomers Look Richer Than Ever
4) Empower: Baby Boomers’ Money Snapshot
Goldstone Financial Group, LLC (“GFG”) is a registered investment advisor with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or qualification. This material is provided for informational purposes only. Opinions expressed herein are solely those of GFG. None of the information presented in this material is intended to offer personalized investment advice and does not constitute an offer to sell or solicit any offer to buy a security or any insurance product and is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.