How working longer impacts your retirement

Reeling from market losses
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Reeling from market losses

The decimation of retirement portfolios in the 2008 market crash is just one of many reasons to consider working longer. "Working longer has three beneficial effects," says Alicia Munnell, director of the Center for Retirement Research at Boston College and author of "Working Longer: The Solution to the Retirement Income Challenge."

"It substantially increases Social Security benefits, a really important source of retirement income because they are indexed for inflation and continue for as long as the person lives.

"It also allows time for 401(k) plans to recover from the recent financial collapse and in normal times simply to accumulate more assets.

"And it increases the ratio of working years to retirement years. Right now the numbers are 40/20. Take four off of retirement and add to work, the ratio becomes 44/16, close to three-to-one."




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