Deciding When to Delay Retirement

Working an extra year or two can give your nest egg a much-needed boost.

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Continuing to work full time is the quickest way to increase your financial security, but you can still make headway even if you scale back on hours. "Maybe now you work part time until 70 instead of retiring at 65," says Roy Williams, chief executive of Prestige Wealth Management Group in Pennington, N.J. Acker says he wouldn't mind cutting back on hours at the architecture firm as he ages. "What I'd ultimately like to do is probably taper off to a few days a week being a consultant," he says. "Not having a real job but still keeping my finger in the pie and being active and perhaps even having an office to go to."

Some current retirees, left with decimated nest eggs and few options for affordable health insurance, have been making the difficult journey back to the workforce. Dannie Needham, 62, a retired computer programmer for Radio Shack in North Richland, Texas, recently went back to work part time to pay for health insurance premiums for himself and his wife, Pat. "We thought there would be something reasonable that would cover us, and there just wasn't anything there," Needham says. "We visited with no less than 10 to 15 group companies, and we were denied insurance based on our pre-existing conditions." The couple eventually joined the Texas State insurance pool, which costs $1,350 a month. To make matters worse, the value of Needham's 401(k) also fell by about $100,000 in 2008.

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To pay for healthcare without depleting his nest egg, Needham now works part time at a local high school driving a bus, assisting the sports teams, and doing general maintenance at the school. Pat is looking for a part-time job as well. "We were pretty naive when we retired, but because we are working these part-time jobs, we are able to make it," he says. Needham also says he enjoys the flexibility of his relaxed schedule. "I didn't want to spend the next 10 years in a cube," he says. "And I wanted to spend the time with the grandkids." He now watches his 3-year-old granddaughter several days a week.

For Christopher Richards, 59, a Single Hill, Calif., line technician for a company that makes aluminum cans, the prospect of leaving the steady paycheck that supported his family for decades was unnerving. "It's like taking a giant leap or jumping off a high-meter diving board in front of a bunch of people," says Richards, who becomes eligible to retire on October 31. Although Richards daydreams about leaving the workforce and buying property in Montana, he recently pushed his retirement date back to January 2013. Layoffs are common in the manufacturing industry, including at Richards's company, and those who have well-paying jobs usually try to hold on to them. "You fantasize about walking out the door and never going back," says Richards. "But the common-sense factor always kicks in."