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John, 61, was all set for retirement.
He was approved for Social Security, and then, just before he gave his notice, was laid off. His severance package covered him until his Social Security payments could start.
With four years to go until 65, he would have to cover health insurance costs on his own.
A new opportunity then arose, making him reconsider his plans. John’s old employer offered him a team-leading, client-facing role in a department he had always wanted to join. The pay and benefits are strong.
He’s tempted, but he can’t see himself working beyond the end of the year. He also wonders if it’s fair to take a leadership job he intends to leave soon. Besides, going back to an employer that had already let him go once seems like a pretty big risk.
That’s the core of his dilemma. Here’s what else is at stake.
Let’s say John is married and that, hypothetically, his 60-year-old spouse has also been on his employer plan. His partner is two years away from Medicare eligibility.
The couple has roughly $1 million saved — about $940,000 in 401(k)s and IRAs and $60,000 in cash — with a nearly paid-off mortgage.
Americans believe they need about $1.26 million to retire comfortably in 2025, according to Northwestern Mutual. (1) So John and his wife are within striking distance of that “magic number” even without maximizing Social Security, but not quite yet.
Working longer would obviously boost their retirement savings. However, for John, the new job may be about more than just money.
Many older Americans say work also offers critical access to health insurance and Social Security benefits. Respondents to the University of Michigan’s National Poll on Healthy Aging (2) claimed other important factors include having a sense of purpose, contributing to society, keeping their brain sharp and maintaining social connections.
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Taking the job could help John in four ways.
Story continues