How far will extra income stretch my retirement money? If you've run the numbers and feel like you just cannot save more or spend less, you're bound to end up working longer. But don't panic, because staying at work (at a job you like) is good for you both mentally and physically as well as fiscally — and you don't have to earn all that much or work all that much longer for it to make a huge difference in your retirement spending. Delaying the date you take withdrawals from your IRA or 401(k), continuing to save and reducing the number of years that your assets will have to generate income is a mighty combination. If you work an extra five years and save 25% of your pre-tax earnings over that period, you can boost your annual retirement income 50%, according to an analysis by T. Rowe Price. If you save just 15% of your earnings over that period, you'll boost income 39%. Even with no additional savings, just by delaying IRA and 401(k) withdrawals for five years, you'll boost retirement income 20%. And none of this factors in the advantages of delaying Social Security benefits, which increase about 8% for every year you do not collect them between ages 62 and 70.
See more questions about how much money you can withdraw each year:
Introduction: How to Spend and Invest
Get Real About How Long You'll Live
Start Retirement with a 4% Withdrawal Rate
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