Delay Retiring: A ‘Smart’ Decision

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If postponing retirement can improve one’s financial security in old age, why do so many people rush to retire when they reach age 62?

Much research has explored the financial and health reasons that explain why so few people choose to retire later.  Taking a different tack, a new study found that individuals with higher cognition foresee a higher probability of working longer.

There were two steps to this research.

First, participants in an Internet survey were asked if they planned to continue working full-time after age 62 and, separately, if they expected to work past 65.  Participants were between the ages of 45 and 61.

Next, the researchers measured each survey participant’s “crystallized intelligence,” which is the wisdom acquired with age.  This type of intelligence helps to compensate for declining “fluid intelligence” – the ability to think quickly – which peaks in young adulthood.  To measure their crystallized intelligence, participants took a standard psychology test in which they are shown pictures – perhaps a goat, maracas, a sextant (an astronomical instrument) – and asked to name them.

It’s an “adaptive” test that is able to measure the gamut of cognitive abilities.  If an individual labels the first set of pictures accurately, then the second set of pictures he is given is more difficult to identify.

Those who scored higher on this test were more likely to plan to work past 62 and past 65, according to the study, which was supported by the Retirement Research Consortium. The researchers controlled for other factors identified in the literature as affecting the likelihood of working after those ages, such as education, sex, health, and non-housing wealth.

Individuals scoring in the middle – at the 50th percentile – on the vocabulary test had a 70 percent likelihood they planned to be working full-time after age 62 and a 40 percent likelihood they would still work full-time after age 65.  But higher test scores indicated greater expectations of working past each age.  Those scoring in the 84th percentile had 73 percent and 43 percent likelihoods, respectively, of working full-time after 62 and 65.

Planning for retirement is complex and can be difficult for many people to get right. Predicting one’s retirement income and expenses for years to come involves a substantial amount of uncertainty.

Not everyone is equally equipped to assess their options.  Some may need more help with their retirement planning than others.

Full disclosure:  The research cited in this post was funded by a grant from the U.S. Social Security Administration (SSA) through the Retirement Research Consortium, which also funds this blog.  The opinions and conclusions expressed are solely those of the blog’s author and do not represent the opinions or policy of SSA or any agency of the federal government

Larry Littlefield

One factor may be a willingness to work for less.

As age slows productivity slightly, workers may feel pressured or pushed out of their original career. They could switch to a lower-paid, less demanding job if their ego would let them (and of course if one is available).

With regard to availability, health insurance is key. Small employers may worry about the effect of those age 55 to 64 on their health insurance premiums. After age 65, when Medicare picks up most of the tab, older workers become a bargain.


I’m 66 and soon to be 67. I plan on retiring next year at age 68. One of the challenges I think I will miss as the general manager of a medium size water district in Oregon is, “Where did that come from? In all the years (17) I’ve been here that hasn’t happened before.” I’ll miss the challenge and my young 24-50 year old staff who will get right on it, fix the problem and make sure the customers all have safe clean drinking water. It may be hard for some to believe, but I’ll also miss the planning and budgeting because the pipe we lay in the trench today should last 200 years, if we planned it right! Awesome! I’ve been so blessed in my entire lifetime.


Seems to me they might have expanded their research if they had included older folks who have already made the decision and seen their results. I retired at 60 based on cash-flow and it has worked out pretty well. We’ve managed to do the things we want while living within our pension and SS income. We’re not the filthy rich but we did save for retirement. Our goal is to continue on – pushing out the decumulation phase as far as possible. I’m not sure either crystallized or fluid intelligence had much to do with it. It was pretty much desire and math 😉

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