The thought of retirement is daunting to some for financial reasons, but it doesn’t have to be. You just need to be well-informed about your options when that time rolls around.
In a recent study conducted by the National Bureau of Economic Research, it was found that there is still hope for people who began saving for retirement a little later in life. According to Life Hacker, the social security effect is highly progressive. This means, the lower your income, the larger your gain in benefits if you put off retiring.
For instance, a lower wage worker needs to work only 2.1 months longer to equal the benefit of 30 years of saving an extra percentage point of income. A higher wage worker needs to work 4.4 months longer to derive the same benefit. Thus, if you can hold out on retiring until age 70 rather than 62, your benefits will increase 8% each year.