Retirement Plan: Delay the Date, Not the Dream

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Retirement isn’t just a financial decision — it’s also about how you’ll spend your time. That’s part of why “phased retirement” has become so popular: rather than quitting cold on a fixed date, you or your spouse scale back hours, shift to part-time or project-based work, and gradually adjust to a lower income while figuring out what to do with newfound free time.

A related idea some planners call “practice retirement” flips the order: keep working full-time a bit longer, stop adding to savings, and use that freed-up cash to start enjoying life now — all while your nest egg keeps compounding and your future Social Security benefit keeps growing.

Why a few extra years matter so much

Consider a hypothetical 60-year-old couple with $500,000 saved in retirement accounts, planning to claim Social Security at their full retirement age of 67. Delaying that claim — even without saving another dollar — pays off in two compounding ways:

• Their portfolio keeps growing. Money that isn’t being withdrawn continues compounding, rather than shrinking every year to cover living expenses.
• Their Social Security benefit keeps climbing. Every year a worker delays claiming past full retirement age, up to age 70, adds roughly 8% to their eventual monthly benefit — a guaranteed increase that isn’t tied to market performance. In 2026, a worker claiming at full retirement age (67) can receive up to $4,152 a month at the maximum, versus $5,181 a month by waiting until 70.

For most people, the actual benefit will fall well short of the maximum — the average retired worker’s benefit in 2026 is about $2,071 a month — but the same 8%-per-year math applies at any income level.

You don’t have to choose between saving more and living now

The appeal of “practice retirement” is that working longer, by itself, does most of the heavy lifting — you don’t necessarily need to keep saving aggressively during those extra years to come out ahead. That said, if you’re 50 or older and still contributing to a 401(k) or similar plan, 2026 catch-up contribution limits are worth using if you can: workers 50-plus can contribute up to $32,500 total, and workers 60 through 63 get an even higher catch-up limit of $34,750 combined.

The takeaway

If your finances are close but not quite where you’d like them to be, don’t assume the only lever is saving harder. Working even two to four more years — full-time, part-time, or in a scaled-back version of your current role — combines a growing nest egg with a permanently larger Social Security check, often closing the gap faster and with less sacrifice than an aggressive savings push in your final working years.

Even in retirement planning, it turns out, practice makes perfect.