Are You Making This Dangerous Retirement Planning Mistake?

NOTE:  A version of this article was previously published on Suze Orman’s website on April 7, 2016.
Suze OrmanI am concerned that many of you are banking on a retirement strategy that may not work out. According to a national survey by the Employee Benefit Research Institute, more than four in 10 Americans say they plan to keep working past the age of 65.

For many of today’s workers, the motivation to delay retirement is financial. A concern they lack the savings to cover all their retirement costs, including health care expenses.

It’s a logical plan to address a major concern, but I need you to listen to me: thinking you can just keep working may be unrealistic. In the same survey, just 15 percent of retirees said they kept working past age 65. That’s a serious gap between expectations (40 percent plan to keep working past 65) and real life (Only 15 percent kept working after age 65.)

Many of those who retired earlier than they expected were sidelined by illness or disability. Taking care of a family member can also derail plans, as can being laid off or pushed out of a job by downsizing.

If your retirement plan is centered around the assumption you will just keep working longer, please consider these important steps:

  • Keep saving. If you aren’t saving for retirement, or pushing yourself to save even more, you’re putting your future security at risk. The best way to navigate the unknown is to hope for the best and plan for the worst. In this case, not being able to keep working longer is a “worst” case scenario. Plan for that by committing to save as much as possible today in your retirement accounts.
  • Keep Sharp. I know you’ve heard plenty about keeping your work skills up-to-date, but many of you still haven’t done much. If there’s no on-the-job training available, check for online courses; there are plenty of terrific web-based classes you can take. Or look into whether your local community college has useful courses in your field.
  • Keep Fit. The healthier you are, the less susceptible you may be to certain illnesses. There’s also the mind-body connection; I’m a believer that when you feel physically strong, it spills over into a frame of mind that can make you more valuable at work. Besides, I want you to be in the best shape possible for when you do retire, so you can enjoy yourself!


SSA does not endorse any particular financial advisory product or service.


66 thoughts on “Are You Making This Dangerous Retirement Planning Mistake?

  1. I delayed retirement by my years. During those final 3 years I drew full social security. I then used a financial consultant to put a plan together whereby either my wife or myself could enjoy a decent standard of living after the other passed. I see too many cases where the surviving spouse (most of the time it’s the wife who survives the husband) ends up really having to lower her standard of living.

  2. Very good point Suze! I laugh at the commercial that has the 40 year old saying she is planning on working till 70…I am 63 and the changes in mind and body since I was 40 are noticeable. I am glad I did not plan on working till 70!

  3. Retired at 59 tears old because the employer need some more younger man and I was supposed to train them but I work with them as a contract person doing same job that when I was working for two more years but invest all the money made in a good retirement found that will protect my wife and I if I died before or after her death, the medical were pay until was 65 years old. So I made the right decision them and enjoy retirement so far.

  4. Suze, you make excellent points on the importance of saving, and remaining sharp and physically fit. I have been doing all 3 with the help of a wonderful book, recently published,
    “Y ON EARTH” by Aaron William Perry. This is an uplifting piece of work with practical applications for Cultivating the Life We Really Want (Part II). You can buy your copy (for a reasonable price) @
    Even for those who are living on little there is so much in which we can participate to keep our lives healthy and vital and “in the loop”. I’m over 65 and I continue to work and earn $$ in various ways that are not overtaxing and are exciting and rejuvenating. There continues to be a need for the elders of our society and we can continue to have so much purpose.

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  6. The single biggest mistake people make when planning on their retirement is relying on Social Security. Social Security was always intended to supplement one’s plans not to be the sole source of income

      • Wrzucal ktos moze Navigon na iphone 4 os 5.1, prelwoabom kilka wersji przez i tuns, blad synch. mam cydie, ale dalej nie wiem jak wgrac, prosze o pomoc.

      • So, If I am at least age 66 1/2 , I can still earn my $85,000 salary and still draw either 1/2 of my exhusband’s benefit without a penalty. when I am 70, I can drop half his beenfit and draw my full social security at age 70?

    • Yeah? And we’re screwed because nearly everything we had saved was evaporated in 2008. With less than a decade to work we had to start over. We’ve done without, we have 11 yr old cars, sold our house at boom peak to put the equity in to help make up. It’s worth 1/4 less now so good decision there. We have a smal fed retirement and a small guaranteed invested retirement but Social Security marks the bulk, as intended to keep seniors out of total, abject poverty.

  7. I worked until 70! I had a busy veterinary practice. What I found out is, by about 2PM in the afternoon, my body had run out of gas. I wanted to practice forever, but one doesn’t realize the physical and mental constraints imposed by your body as you age. So, it’s not always about Social Security and retirement money, but about how much you hate to leave your job. Sometimes, mother nature makes that decision. I took full benefits at 65, but had to pay back some on my taxes. But then, your benefits continue to rise as you work later in life! It’s kind of taking it out of one pocket and putting it back in the other. The biggest thing, I believe, is to keep your body as healthy as you can if you plan to work after 65.

  8. II always planned to work to 62. As a Government Employee under FERS, it seemed to make the most sense for me. I’d had a disability for 30+ years, but never really considered myself to be disabled. When the Gov’t planned to close the Air Force Base that I worked at, I was faced with moving far away at age 58 to keep a Gov’t job. When I investigated Disability Retirement, it was a no-brainer to file. I actually received a Disability Retirement 4 months before I turned 58, and was actually able to collect unemployment from my state!. Now that I am 62, my Disability Pension was recalculated as if I had worked to age 62, my SS is about what it would have been if I’d worked to age 66, and because I had the forethought to have a private Disability Insurance Policy (and a really good Insurance Agent), I didn’t lose out by not being able to keep contributing to the TSP. I guess what I’m trying to say is look at All of your options before making the big decision to retire.

    • Good, solid content. I just now forwarded this on 6/6/2019 to a classmate who has been doing some work of their own on this subject. To say thank you, they just bought me lunch! So, let me express my gratitude by saying: Cheers for the drink!

  9. I am 86 this June. I work 40 hours a week as a cashier for a large retailer. So far I am fine physically with the job. But the screaming children are driving me to insanity. I would like to quit, but I only have $39,000 in my 401k. and just a little in a savings account. My SS is $1,200 / month, not enough to live on and maintain my house if I quit the 40 hour / week job. I am a Korean vet, honorably discharged, but I have NOT, EVER applied/joined the VA (I know, I should). I have never been unemployed or drawn unemployment. … I am a complete dumb bell. Any advice other than diving off a short pier?

  10. By starting to receive SS Benefit at 62 and suspending it after one year. How will it impact the benefit if one continue to work until full retirement age of 66.

    • Great question! Delayed Retirement Credits happen after your full retirement. Generally, benefits will increase based on the number of months you did not receive benefits between your full retirement age and age 70. These increases will no longer happen once you turn age 70, regardless of whether you continue to delay taking your benefits. You may use our Early or Late Retirement calculator to compute your exact situation. For more information, visit our webpage, Retirement Planner: Delayed Retirement Credits. We hope this helps.

    • Emmanuel, Assuming you have the Full Reduction Months of 48 at 62 and then suspend your benefits after 12 months and then resume receiving your benefits at age 66, your reduction will be recalculated. They will look at your 48 reduction months, see that you did not use 36 of those months and therefore recalculate your benefit with only 12 months of reduction.

  11. I am 79 and still working a few days a week as a bookkeeper/receptionist in a small company and I have enjoyed it very much. I feel that I am in fairly good shape and it has been great for my health/mind to continue working.However I agree that at some point your body tells you that it’s time to possibly stop

    • Hi Mark. If a person begins to receive benefits at age 62 or prior to their full retirement age, their benefits are reduced. The reduction factors are permanently applied to all of the benefits the person may qualify for. Please visit our Retirement Planner for more information.

    • Once you take your reduction in most instances it is fixed but it doesn’t mean your only choices are age 62 or 66 1/2. You can choose any month within in that period to retire. As an example if the maximum months your benefit can be reduced is 54 months, if you decide to retire at age 63 1/2 then your months of reduction would only be 36. You can elect 1 month of reduction all the way up to the 54 months of reduction.

  12. I started collecting on my own benefit at age 62. I was born in 53. My ex husband ( whom I was married to for 12 years will turn 62 Dec 2017. He made a lot more money than I did. Will my ex spouse benefit be reduced because I collected on my own benefit at age 62? I will be 64 in Dec 2017 when I am eligible to collect on his

    • Hi Mary. You’re starting to collect benefits on your own record at age 62 do not affect your ex-spouse’s benefits. Also, in order for you to be eligible for divorced spouse’s benefits, and in addition to have been married for over 10 years, your ex-spouse must also be entitled to Social Security retirement or disability benefits. However, if your ex-spouse has not applied for retirement benefits, but can qualify for them (at age 62 or older), you can receive benefits on his record if you have been divorced for at least two years. Remember, if you are receiving retirement benefits on your own record and are eligible for divorced spouse’s benefits, we will pay the retirement benefit first. If the benefit on your ex-spouse’s record is higher, you will get an additional amount on your ex-spouse’s record so that the combination of benefits equals that higher amount. To learn more visit our “Retirement Planner: If You Are Divorced”. Thanks!


        • Hi Mari and thank you for the observation. In general, if a person begins to receive benefits at age 62 or prior to their full retirement age, their benefits are reduced. These reduction factors are permanently applied to all of the benefits the person may qualify for. For more on ex-spouse benefits visit our Retirement Planner: If You Are Divorced for more information.

  13. Mary, If you took your Retirement benefit at age 62 and had 48 Reduction months and file for Divorced Spouses Benefits when you are 65, then your Surviving Divorced Spouse’s benefit will only be reduced by 12 months.

  14. I have a question. I am 63 and contemplating signing up. I do not plan to work at all anymore. I have plenty of quarters of work to qualify. I understand if I wait that there will not be the early penalty. Does not working until my full retirement age have any impact on the amount? Or, is it simply the waiting until full retirement age that has the impact on the amount I will receive?

    • Thank you for your question, Gayla. Your monthly benefit amount will be different depending on the age you start receiving it. The longer you wait, the higher the benefit. If you choose to start your benefits early, they will be reduced based on the number of months you receive benefits before you reach your full retirement age. If you wait until full retirement age, your benefits will not be reduced. Full retirement age is the age at which a person may first become entitled to full or unreduced retirement benefits. Keep in mind, however, any benefit estimates you receive assume you will work at the same rate and amount. If this changes, it may affect your estimate. To check estimates with what if scenarios such as these, use our Online Retirement Estimator. To help you plan for the future, you can use our Retirement Planner and you can also create a my Social Security account to verify your earnings, get your Social Security Statement, and much more. We hope this information helps.

    • Hi Janice. Each year, we review the records for all working Social Security recipients to see if additional earnings may increase monthly benefits. If your earnings for the prior year are higher than one of the years we used to compute your retirement benefit, we will recalculate your benefit amount. Generally, we will send a letter explaining any increase in your benefit amount. Please call our toll free number at 1-800-772-1213, Monday through Friday, from 7 a.m. to 7 p.m. or contact your local office directly for further assistance.

  15. I am presently 65 years old, as of Aug 2017. I have decided not to take my SS until I turn 70. My wife is 59 as of Aug 2017. When she turns 62 can she receive SS from my SS retirement estimated amount at that time, and receive that amount until I turn 70 and start taking my SS and then she would switch to taking the SS amount that she has earned?

  16. I was born in January 1953 (I am 65), and my husband was born in November 1953. My husband has been largely self-employed and hasn’t paid Social Security, but would get some benefits from jobs earlier in his career. I am currently employed and intend to work as long as possible, at least until 67. My question is, does it make sense for one of us to begin drawing Social Security benefits now, or at 65 or at 67, and if so, which one of us? He is never going to pay in another dime, but I will be doing so.

    • Hi Ellie. Please bear in mind that the decision on when to apply for benefits is a personal one. We can only provide you with the information to help you make the best choice according to your own situation. There are a lot of factors that go into deciding when to retire and each individual case can be different.
      We also provide a variety of benefit-calculators to help you and your husband plan for the future.
      We suggest that you and your husband create a my Social Security account to verify your earnings and get your Social Security Statement. Please visit our Retirement Planner for more important information. We hope this helps!

      If you have specific questions, please call our toll free number at 1-800-772-1213, Monday through Friday, between 7 a.m. and 7 p.m. and speak with one of our representatives. We hope this information helps!

  17. I’m not retiring I still will collect on behalf of my dad King David A.k.a. King Ray McLaughlin Sr Luke chapter 19! What is due for my future offspring’s! They also stole from me if I don’t stop them now from stealing from me they always going to feel like they have a right to take my children away from me, like if I have no right to the Bible more than thry do charging me rather than me charging them, is not a wise decision, because of their behavior not only I had to pay but my daughter had to pay and my twin brother had to pay when the Bible belongs to us therefore tax return is necessary from all organizations using the trademarks of the Bible regardless if they missed use the bible meaning they still use the Bible in someway formal fashion there for my dad comes to Social Security to make sure that Social Security taxes all the people who used the Bible so my future offspring’s does not get taken from me because we owned the Bible!

  18. I’m a single 70-year-old senior. Laid off two years ago from work. My Social security is all that I have. $17,000 a year. Do I have to pay taxes on that I mean file taxes? I have $1400 interest on my home which I have to sell
    Because I can’t afford it any more!

    Thank you.

  19. Bad info from SSA about starting at 62. Read alot on the SSA site and even made three calls to make sure I understand things then filed for SSR at 62. Was told that my military retirement, IRA distributions and investment income would not cause taxes if I started SSR. WRONG, CPA just did 2017 taxes and had to pay IRS $1,506.00 because the SSR stacked on top of my military retirement and investment income (don’t have a job or any earned income). Asked SSA if I could suspend payments know that I know the truth and told I exceeded the 12 month deadline. Now the IRS will eat a big chunk of my already reduced SSR. Thanks SSA.

    • Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits. For any income tax related questions, you will need to contact the IRS. Their toll-free number is 1-800-829-1040.

  20. My job is ending on May 25. I will be 66 in September so I went ahead and enrolled in Medicare Part A and B and filed for Social Security to start in June. Should I have waited and filed for unemployment first? Is this going to keep me from getting unemployment?

    • Hi. Jerry. Thank you for your question. Everyone working in covered employment or self-employment regardless of age or eligibility for benefits must pay Social Security taxes. Also, you will have to pay Federal taxes on your Social Security benefits if you file a Federal tax return as an individual and your total income is more than $25,000. For further income tax questions, you will need to contact the IRS. Their toll-free number is 1-800-829-1040. We hope this helps.

  21. My Mom must be in the 1% she’s 81.5 years old and is finally retiring. She said she had to keep working because she can’t afford to retire.

  22. I have worked past age 65 now 67- SS has continued to take full amount from me although I reach total by Sept of each year. I started taking my benefits at age 62, what do they do with the extra money that I have been paying all those years? It doesn’t seem to be showed any where.

    • Hi Michael, thank you for reaching out. When you reach full retirement age, we recalculate your benefit amount to leave out the months when we reduced or withheld benefits due to your excess earnings. In addition, each year we review your work record. If your earnings for the prior year are higher than one of the years we used to compute your retirement benefit, we will recalculate your benefit amount. We pay the increase retroactive to January the year after you earned the month.

      To inquire about your benefits, contact your local Social Security office or call our toll free number at 1-800-772-1213. Representatives are available to help you Monday through Friday between 7 a.m. and 7 p.m.

  23. “However, if your ex-spouse has not applied for retirement benefits, but can qualify for them (at age 62 or older), you can receive benefits on his record if you have been divorced for at least two years.”

    The above is an answer Ray Fernandez gave on this forum. However, when I applied for my benefits at age 63, my first statement from SSA said that I would be getting xxx number of dollars as a wife/ex-wife and xxx number of dollars on my own record. At that time I had NOT been divorced for two years. I made it very clear to the agent in the SSA office that I had only been divorced for one year but she still figured my amount based on my ex-spouse’s record.

    To this day, six years later I’m not sure how this affected what I receive, but I just wanted to point out that I got so many conflicting answers when I pursued this that I gave up.

      • At the time I filed for my benefits my ex-spouse had NOT applied for his benefits. However, at that time I had no way of knowing if he had or had not filed because it is confidential information that cannot be revealed. After the fact, during a court procedure, a judge asked him if he was receiving Social Security and he said he was not. So of course now I know that he had not applied for benefits at the time I filed, therefore the Social Security people were incorrect in figuring my benefit using his record too. Am I correct in this?
        P.S. I didn’t file against his record. It was the Social Security office that decided to file using his record.

        • Still waiting for your reply on this. Did Social Security err in figuring my amount using his record?

  24. 5/23/2019 does it again! Quite a perceptive site and a well-written post. Keep up the good work!

  25. The IRS taxed my social security for 2017 . IMy social security was below the taxable amount and charge me a penalty
    I’m very upset I if I owe I have to pay . . Please help someone

  26. The IRS taxed my social security for 2017 . IMy social security was below the taxable amount and charge me a penalty
    I’m very upset I if I owe I have to pay . . Please help someone

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