For many, the traditional retirement age of 65 is becoming outdated. People are working longer, driven by factors like improved health, shifting Social Security rules (full benefits now available at 67 for those born in 1960 or later), and financial uncertainty. If you’re postponing retirement by five years, maximizing this period is crucial. Here’s how to prepare:
Maximize Retirement Contributions
The IRS allows older workers to contribute more to tax-advantaged accounts. In 2025, those under 50 can contribute up to $23,500 to a 401(k). But those 50 and over can add an extra $7,500 for a total of $31,000. Even better: if you’re between 60 and 63 in 2025, the catch-up contribution rises to $11,250, allowing up to $34,750 in total contributions.
For IRAs, the standard contribution limit is $7,000 for all ages. Those 50+ can contribute an additional $1,000. Increasing your contributions now ensures a more secure future.
Simulate Retirement Spending
Before leaving the workforce, test-drive your retirement budget. Start by estimating your Social Security benefit (available via the Social Security Administration’s website) and any pension income. If you plan to work part-time, factor that in. Determine a comfortable withdrawal rate from savings, then live on that amount now.
This exercise serves two purposes: it reveals whether your projected income is sufficient and identifies potential savings gaps. Adjusting your spending today can reveal hidden savings opportunities and confirm whether delaying retirement is financially sound.
Prepare Social Security Documents
Streamline the application process by gathering required documents before you retire. The Social Security Administration requires birth information (especially for those born outside the U.S.), marriage details (including dates, locations, and spouse’s details), and employment history for the last two years (including employer names and dates).
Veterans should have service records ready, and everyone will need bank account details for direct deposit. Filing online through a pre-created Social Security account is the fastest method. Gathering this information proactively avoids delays when you’re ready to claim benefits.
Delaying retirement is now commonplace. These steps—maximizing contributions, simulating retirement spending, and preparing paperwork—ensure that when you finally step away from work, you do so with financial confidence.
