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Delay Retirement, But No Dirty Looks Please

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RETIREMENT
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It's one of the dirtiest looks I get as a financial adviser.

Why would anyone give me the evil eye, you ask?

I've completed a financial plan for an individual or a couple, and we are reviewing the results. I just told them that working longer could be an option instead of retiring when they want to. You would think I just told them their retirement went terminal!

Some people just can't or won't put it off. After the credit crisis in 2008 many would-be retirees had to put off retirement a little longer. That's because portfolios declined by up to 50 percent! Retirement wasn't an option.

So what are the alternatives to putting off retirement? What can you do now that will allow you to retire when you want to?

Save more. Sorry, there aren't too many options that will impact your situation quite as much. You have to kick in more to your retirement plan at work or that IRA. Once you max out you could save in a taxable account such as a brokerage account.

Reduce retirement lifestyle. Another option could be spending less in retirement. You could move where the cost of living is less, or just reduce your debts and expenditures in retirement. Work on paying off your mortgage or find a cheaper place to live.

Get more aggressive. This is probably my least favorite option. As you get closer to retirement, your investments should be more conservative. That's because you have less time to recoup any losses incurred by our beloved stock market. To be honest, saving more will impact your situation more than hiking your stock allocation.

Delay Social Security. Why take Social Security early if you are putting off retirement? Every year you delay taking Social Security, your benefit increases. This could really close the gap. Plus by working longer your benefit will increase. That's because you are likely in your peak earning years.

Bottom Line Delaying retirement by just a few years can really make a huge difference. Work just a few more years, earn more and save more. It really is a viable option. Oh, and no dirty looks please.

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