The Wealthy Retiree Part 4 – The Benefits of Delaying Retirement
Quaero waited patiently by the curb out front of the senior community where he worked. It was Tuesday. Quaero liked Tuesday because it meant that he would get his next lesson on retirement success from the wealthy retiree, Will Pecunious, a resident of the complex. When Quaero arrived at Will’s apartment with sandwich in hand (that was the price Will charged for his time and knowledge) there was a note on the door from Will that told him to meet out front. Quaero, for the life of him, could not figure out why.
Quaero’s fingers drummed nervously on the tuna sandwich when he saw the most pristine red 1956 Chevy Corvette convertible pull slowly around the corner from the parking garage. He admired the car for a few seconds when, despite wearing a hat and sunglasses, he recognized the driver as Will. At 83 years old he looked about as tough as Clint Eastwood strolling into town on horseback in an old western. Quaero realized his mouth was awkwardly hanging open when the old man pulled up in front of him and yelled, “Get in!”
Without thinking, Quaero slipped into the passenger’s seat and they were out of the parking lot and onto Main Street in a matter of seconds.
“Quaero, meet Lucy. Ain’t she a beauty! Wait until we get her on the highway! I’ll show you what she can do.”
Excited and a little nervous, all Quaero could utter was, “Okay!”
“Do you know how I was able to afford Lucy?” Will asked as they waited at a stop light.
“Not a clue”
“I delayed my retirement one year!”
“What! Really?”
“That’s right. I could have retired at 65 with a full pension, my investments, and Social Security. But owning a ’56 Vette has always been my dream. I did some calculations and figured that in order to get the additional $50,000 I needed to purchase the car; I had to work for another 12 months, delaying Social Security and continuing to contribute to my portfolio.”
“Wow, that’s incredible! Weren’t you frustrated when you turned 65 and knew you had one more full year of work?”
“No, not at all. I was retiring on my terms. It was my choice. I knew 12 more months plunging toilets would accomplish one of my lifelong dreams. I had already done it for over 40 years; I figured what’s the big deal to do it one more to own this baby forever!” Will replied as he patted the dashboard like a proud papa.
“If you want to juice up your retirement lifestyle, delaying retirement can do it. Just a one year delay in retirement will offer the following benefits:
- One more year for your portfolio to grow
- One less year to live off your assets
- One additional year of socking money away for retirement
- Allow Social Security benefits to grow by delaying your benefit.
That’s four very large benefits in one year. Think of how that can build if you wait longer. Working 4 additional years can increase your retirement income by 45% and 8 years can more than double your income. Pretty incredible, huh?”
“I’ll say. So, how do I know when the time is right for Maria and I?”
“That’s the beauty of this strategy; it is completely up to you. Determine approximately how much you will have to live on if you retire at your ideal age, then run some numbers delaying that date a year or more. You’ll be surprised. It will then be left to you and your wife to decide how much is enough. I have never regretted working an extra year. I have had Lucy for almost 20 years and she still purrs like a kitten.”
Will smiled as the signs for the freeway were now in front of them. Quaero had not even noticed, he was deep in thought.
“What do you say Quaero, are you ready to kick it into a higher gear?” Will asked as he accelerated up the on ramp to the freeway.
“You bet I am!”
Next Issue: Lesson #4: “Don’t be a Sheep!”
