You decided long ago that 2025 was going to be the year you retired. Now it's here, and you're wondering whether that's still the best plan. Perhaps you weren't able to save as much as you'd hoped for retirement. There's a lot of uncertainty right now about tariffs and how they could increase inflation. And Social Security's future still has a lot of question marks, too.
So you might decide that postponing your retirement for a few months or years is the best move for you right now. That's OK. But if you're thinking of going this route, make sure you also take the following three steps.
Image source: Getty Images.
1. Brush up on your professional skills
If you plan to delay your retirement for longer than a few months, it's important to keep your professional skills sharp. This is especially true if you hope to pursue a promotion or find a better-paying job elsewhere for the last few years of your career.
You could earn a professional credential or take a continuing education course in your field. Or maybe you prefer to challenge yourself with new tasks at your current job. This sort of effort will help you stand out compared to others who might be vying for the same positions.
2. Create a revised retirement plan
Decide how long you want to push your retirement back, and then revise your financial plan accordingly. If your delay is going to be significant, you will likely be able to get by with a smaller nest egg than you'd need if you retired now because your new retirement will be shorter and therefore cost less overall. Your existing investments will also have more time to grow: Assuming the stock market cooperates, your portfolio could be worth more than it is today by the time you start drawing down on it.
Go back to the drawing board if you have to, noting how much you have in retirement savings right now, how much of your own money you expect to spend per year in retirement, and how long you expect your retirement to last. You can plug all of this into a retirement calculator or try the 4% rule to estimate how much you'll need, and how much you'll be able to safely draw down on your assets each year.
A retirement calculator can also help you figure out how much you need to save per month in order to achieve your goals. Consider planning for a 5% to 6% average annual return from your portfolio if you want to be conservative.
Try to stick to this plan as best you can. If you don't think you can save as much as you need to, you may have to delay your retirement even longer or consider looking for ways to reduce your retirement expenses, if possible.
3. Rethink your Social Security claiming strategy
If you're not already on Social Security, you might want to rethink your claiming age as well. The earliest you can file for benefits is age 62, but until you turn 70, every month that you delay beyond that permanently increases the amount of benefits you'll receive each month. You can grow the size of your checks by anywhere from 5% to 8% per year doing this move.
Delaying Social Security while you continue to live off your paychecks could help you reduce how much you'll need to save for retirement on your own because each of your checks will go further when you do eventually sign up.
However, it's important to keep in mind that we still don't know what Social Security will look like in a decade. The trust fund that helps cover retiree benefits is being depleted to pay today's beneficiaries, and it's projected to run dry in 2033. After that, if nothing changes, the program will only have the funds from future payroll taxes to work with, which won't be enough to meet its commitments to American retirees. At that point, analysts project that a cut of around 23% to Social Security payments would be necessary.
While we can hope that Congress will reform the program and address its budget shortfalls to avoid severe benefit cuts before the Old-Age and Survivors Insurance Trust Fund is tapped out, it's unclear what sort of reforms might actually come out of Washington. The more you are able to cover your retirement expenses on your own, the better insulated you'll be from any future Social Security shakeups.
When you reach your new retirement date, review your retirement and Social Security plans one last time to make sure you're comfortable with them. If not, you could always push off retirement a little while longer.
