4 Signs You Should Wait Another Year Before Retiring

Key Points

• Retiring without adequate savings could put you in a difficult financial situation.

• If your investments have recently tanked, you may want to wait until they recover before dipping into your savings.

• Having activities to fill your retirement with will help you combat loneliness and boredom.

• The $23,760 Social Security bonus most retirees completely overlook ›

You've been thinking about retirement for a long time, and you're nearly to the retirement date you marked on the calendar. But now that the end of your career is in sight, you're not quite sure whether you're ready to leave the workforce behind.

It's a natural concern that comes with major life changes. But it could also be a sign that something's not right with your retirement plan. If any of these apply to you, you might be better off waiting another year or two before you retire.

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1. You're worried you don't have enough money saved

Running out of money in retirement is rightfully worrying. Without enough savings, you might have trouble remaining in your home or paying for basic expenses. The tricky thing is, we can never know exactly how long our retirement will last or how much it will cost.

If you have little to no savings, you're better off remaining in the workforce for as long as you can so you have access to a steady paycheck. You could consider dropping to part-time if working full-time is too strenuous.

It's also fine to work another year or two even if you have a large nest egg, just to be safe. It might make a bigger difference than you think. You'll not only be giving yourself more time to save for the future. You'll also be shortening the length and cost of your retirement. It might also let you delay Social Security, which could lead to larger checks.

2. You have a lot of debt

It's not impossible to retire with debt, but it could make managing your retirement finances challenging. This is especially true if you're carrying high-interest debt, like credit card or payday loan debt. Interest rates on these loans are high, and your balance can swell quickly if you're not careful.

Working longer could give you additional time to pay your debt off, or to at least work out a repayment plan you can stick to. You may want to speak with a credit counselor or explore debt consolidation if you're struggling to pay off all your debts.

3. Your investments have recently taken a hit

Small ups and downs are a normal part of investing. But if you're retiring amid a recession and your investments have taken a large hit, waiting to retire may be the smarter move.

If you retire as scheduled, you'll have to sell off a greater portion of your assets to get the money you need to cover your expenses. But if you leave your money invested for another year or two, there's a good chance your portfolio will rebound. Then, you'll be able to get your cash without selling as much of your assets.

4. You're retiring from something instead of to something

Retirement can feel lonely if you don't have other activities to fill the time that your work used to occupy. Whether that's spending time with friends or family, devoting yourself to charity work, or exploring a new hobby, you need something that can give you a sense of purpose and an opportunity to socialize with others.

If you have no idea how you'll spend your retirement days, you may want to hold off until you've had time to consider this question a little more. You may also want to figure out what you'll do if you decide you regret retiring.

Retirement is a major decision, so you don't want to enter into it lightly. If any of these reasons gave you pause, step back and think through your options carefully. Make sure you have a plan for how you'll tackle these issues before you hand in your letter of resignation.

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