12 Costly Reasons Why Retiring at 65 Might Not Be a Good Idea

Just because you turn 65 doesn’t mean you’re automatically prepared to retire. Here are some reasons you might want to wait.
Updated May 1, 2024
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So, you’ve made it to your magical 65th birthday, and you’re ready to hand in your retirement letter. But are you actually prepared to retire?

There are many reasons why retirement may not be in your best interest when you reach 65, and it may be a good idea to review your retirement portfolio before you pack up your desk. You still may need to consider ways to grow your wealth.

You haven’t checked your Social Security benefits

Rawpixel.com/Adobe social security benefits agreement

A common way to pay for living expenses when you’re retired is with Social Security benefits. But before you start cashing those checks, check out the Social Security website to find out how much you are eligible to receive each month.

If you put off when you begin collecting your Social Security payments, you may be able to get a higher monthly payment. But that could mean waiting years after your 65th birthday to earn the most that you can.

It’s also not wise to rely solely on your Social Security checks, no matter when you decide to start receiving payments. Consider ways to supplement your income, particularly if your monthly payments won’t completely cover your bills and other expenses.

You still have a mortgage

Proxima Studio/Adobe senior couple paying bills together

One of the biggest expenses you’re likely to take on in your life is a home mortgage, and you still may be paying it once you retire. Consider paying off your mortgage while you’re still working and get that expense out of your budget before you lose your steady work income.

Pro tip: If you’re planning for retirement, think about paying off car payments or credit cards to reduce your debt and boost your credit. Debts you pay while you work won’t follow you into retirement when your income is reduced.

The market is in a downturn

Rido/Adobe dissapointed man looking over a stock market crash

You may have reached 65 and decided it’s time to turn in your retirement, but there are some factors beyond your control you should consider. For instance, a bear market could wreak havoc on your retirement funds and make you rethink if and when you should retire.

Think about holding onto that retirement letter until your investments are on an upswing rather than cashing out a 401(k) after it’s lost some money.

Your employer-provided health insurance is good

goodluz/Adobe doctor going through results and medication on tablet with senior patient

One of the advantages of turning 65 is that you can enroll in Medicare, which can cover many medical issues. However, you may have to pay for supplemental insurance for expenses Medicare won’t cover but that your employer's health insurance plan will, like dental or prescription drugs.

You don’t want to retire

Monkey Business/Adobe senior hispanic woman working on computer at home

No one said you have to retire at 65. Maybe you like your job or enjoy going to work on a regular basis. Perhaps you feel it’s important to be a mentor to younger co-workers. You might even find that it's nice to make some extra cash on the side without the stress of a full-time job.

There are plenty of ways you can contribute to a company or organization after you’ve reached 65, so don’t assume you have to retire once you reach that age.

You haven’t rebalanced your portfolio

agenturfotografin/Adobe senior woman in her living room checking her investment portfolio on a tablet

It’s smart to start investing money in retirement accounts when you’re younger and letting those accounts grow over time. But when was the last time you took a look at your investments and adjusted your accounts based on your needs?

As you get older, consider making your portfolio more risk-averse since you won’t have as much time to earn back any losses as you could when you were 35. Overly risky investments could sink your retirement savings if you don’t rebalance your portfolio before you stop working.

You haven’t created a retirement budget

insta_photos/Adobe senior mature business woman holding paper bill using calculator

You saved money for retirement, and that’s great, but is it enough? The best way to find out is to sit down and create a retirement budget. It may be easier to estimate costs for everyday expenses when you’re closer to 65 than when you’re younger, but you still need a budget to get a clear picture of what your monthly expenses will be.

You don’t have enough in retirement funds

whyframeshot/Adobe Serious stressed asian senior old couple worried about bills

What happens when you create a retirement plan that’s a bust? It could mean you’re not ready to retire at 65.

Your retirement savings should cover your living expenses for years — possibly decades — to come. The last thing you want is to reach 80 and realize you’ve run out of money since you didn’t budget correctly or overspent your savings.

You want to live large in retirement

Rawpixel/Adobe group of senior friends dining happily

Some retirees want a simple life after they leave their jobs. They may enjoy having friends over for coffee or visiting the grandkids. But what if you want to really live it up in retirement?

You can do that, but it may cost extra. So sure, enjoy lavish vacations and expensive dinners out on a regular basis when you retire, shop all you want, or pay for fancy experiences. But a few more years of working could help you retire in style. 

You want to move to a retirement community

Rido/Adobe Senior people stretching at gym

Retirement communities — especially those for retirees over 65 — have become popular with Americans. Perhaps you’re looking forward to moving somewhere warm, or you’d like to live near plenty of golf courses. But a retirement community and the amenities that come with it could come with a hefty price tag.

You have dependents

JU.STOCKER/Adobe happy senior asian father and adult son using laptop

You might not have small children running around your house when you’re 65, but that doesn’t mean you don’t have people who depend on you financially.

Perhaps you have older children who are still in college and depend on you for tuition. You may also have kids or others who live in your home and depend on your income. Until they’re clear of your income, it may be a good idea to continue working for a steady paycheck.

You’re rebuilding after a financial setback

fizkes/Adobe Tired mature 60s man working at laptop from home

Financial setbacks can happen to anyone and at any time. Maybe your house was foreclosed on during a real estate collapse, you had to declare bankruptcy, or you were faced with a pile of bills after a medical emergency.

In addition to preparing yourself for the next recession, try to get clear of any financial setbacks and put them in your rearview mirror before you consider retiring.

Bottom line

Monkey Business/Adobe Senior couple walking together in the countryside

Retirement can be a good thing, but it may not be the best option when you turn 65 if you aren’t prepared. Take an honest look at your budget, your retirement funds, and your plans for your post-work life to figure out the best balance for you. Decide if you still need to grow wealth even at your age.

Whether you’re near or far from 65, start planning now and set goals for investing money today so you can reap the rewards later.

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.

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