The Retirement Benefits of Working Longer

And we're going to talk about working longer, which sounds terrible, right? Who wants to work longer? But the truth is working longer is the solution to the financial problems of many people, right? What happens when your career becomes longer? Well, a number of really good things happen. For example, your Social Security benefit goes up. Not only are you not taking it early, but you're continuing to put more money into Social Security and your benefit goes up. You also have less of life ahead of you to pay for. And so you don't need as much money going forward. The more you work, the longer you work, the less money you need, because you won't. You're not going to live forever. You're not invincible, right? You're going to die eventually of something. And the older you get, the more likely that becomes. And so the longer you work, the less of a time period you're going to have in retirement. But you also have more time to save for retirement. And especially as people tend to get in the latter half of their career, often they're making more money than they've ever made before, especially on a nominal basis. And so they're saving tons of money, right? And you get catch up contributions in your HSA and your IRA and your 401K and your 403B and your 457B. You can actually put more money in there. So more of your savings is growing in a tax protected way. It gives your savings that you already have more time to compound. Compound interest works. And so a lot of times people that don't really have enough to retire, just a few more years of work and all of a sudden they do have enough to retire. It can really solve a lot of problems. The issue, of course, is that your retirement date is not 100% in your control. I saw a survey recently. I think it said 52% of retirees are retiring kind of against their will, not at the date they would have chosen to retire, whether that's from disability, whether that's from job loss, whether it's just because their back hurts or whatever. 52%, right? There's age discrimination, there's all these other things that can happen to people. So don't assume that this is the solution to your lack of ability to invest properly, your lack of ability to save enough money. It may not work for you, but if it can, if you're trying to solve an issue of not having enough for retirement, consider working longer. Another year, two years, three years. It can make a dramatic difference. We became financially independent somewhere around 2018, right? And now it's 2024. We've been working for six years after financial independence, and I'll tell you, we're in a heck of a lot better financial situation than we were in 2018. Things only get better. It's like I'm telling docs all the time, if you're doing this right, you're getting richer every month of your life. And there's occasionally an exception when there's a big bear market or something, but for the most part, that's true. You become in a better and better and better financial situation. And so consider working longer in order to reach your financial goals. You may find that that is the very solution you need. I got an email this week from a doc that's 54, in residency and not much in assets at all, but wants to be able to retire by 70, 16 years. Right? That's enough time to get the financial independence. You do have to have a pretty good savings rate, and you can't make a lot of mistakes with your money. You gotta do just about everything right when you're working on that sort of a timescale. But so long as he's able to work to age 70, I think he can still do it and have a very dignified retirement. But can he retire at 58? Probably not. Probably not going to be able to retire at 58. Just not going to be an option for him. But if you're 35 and you're listening to the White Coat Investor podcast out there, or boy 58, I'd be surprised if you couldn't be financially independent by 58. Applying the knowledge you're getting on this podcast to your high income in your life. It's like having a superpower. I mean, you'd be amazed how quickly your wealth starts compounding how rapidly your debt disappears. Like Jeremy's today that we talked about in the podcast when you're dedicating significant chunks of change to it every month.

The hosts of the White Coat Investor are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.