How to Decide Whether to Delay Retirement 

The decision is a highly personal one that comes with a variety of benefits and pitfalls.

Craftsperson working on stained glass pattern in workshop, focus on hands

If you decide to hold off on retirement, that doesn't mean you have to stay in the same job.

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For many people, retirement is a long-awaited period of relaxation after decades in the workforce. However, in recent years, American workers have continued to tack year after year onto their careers. And while some may cringe at the thought of postponing retirement, others see working as an opportunity to remain engaged and challenged.

A 2013 Gallup poll found that 75 percent of adults plan to work past the traditional retirement age, and 35 percent say it will be because they have to. Like most retirement decisions, determining whether to extend your career a few more years is a complicated choice with benefits and shortcomings.

[Read: The Best Places to Work in Retirement.]

A driving factor behind many workers’ decision to delay retirement is money. The longer you work and the more you save, the more funds you'll have during retirement. "Waiting to retire means that you’ve got more income, number one, and if you are a prudent steward of your income stream, you’re going to save a portion of that additional income," says Robert Fragasso, CEO of Fragasso Financial Advisors in Pittsburgh.

Even if you don’t save like you should, waiting longer to retire means you’ll also delay drawing down your assets. By waiting to withdraw, pensions and other savings can continue accruing interest, which adds up over time. Income from work may also keep up with inflation and rising medical expenditures.

The money in your personal retirement accounts won’t be the only thing that grows. "The longer you put off claiming Social Security, the larger your monthly benefit will be," says Nancy Collamer, founder of mylifestylecareer.com and author of "Second-Act Careers."

Delaying retirement doesn’t mean you have to stay at the same job, though. One way to balance the financial benefits of staying in the workforce with the desire to retire is to transition into a new career. "People are doing all sorts of things after they leave their career," Collamer says.

[Read: How Working in Retirement Affects Your Social Security Benefit.]

She cautions that second careers require some forethought. "When you start something new, there is some period of retraining, and there’s also a startup phase," Collamer says. "That can be very exciting, but it does take energy and investment of time and sometimes money." It’s important to give yourself enough time to get situated in your new career and test it out before leaving your full-time job.

Delaying retirement can also result in unforeseen problems. Staying on the job too long can leave you worn out. "Maybe you’ve given up so much of yourself to the company that you don’t have anything left that you can use," says Ernie Zelinski, a prosperity coach and author of "How to Retire Happy, Wild, and Free." Collamer says people thinking of putting off retirement should consider the "value factor" of the job. "[Are] you still getting value out of going to work?" Zelinski asks. "And that value extends far beyond the financial. It’s also, are you enjoying what you’re doing?"

Delaying retirement for too long can mean missing out on the activities you planned to partake in post-career. Zelinski says most retirees continue with leisure activities similar to the ones they enjoyed while working. "The thing is to have a good balance in life before you retire so that when you’re still working, you’re enjoying a lot of leisure activities, so that when you retire, you’re already engaged in leisure activities," Zelinski says.

[Read: 10 Reasons to Avoid Retirement.]

Planning ahead may give you the option to retire when you want and increase the likelihood that the decision to work longer will be a choice, not a necessity. "You can start your savings program and your plotting for economic security and independence in your 20s," Fragasso says. "The watch phrase is advanced planning."