The best reason to delay retirement

Everyone knows the financial arguments for why we should wait as long as possible to get Social Security benefits: Your benefits grow 8% each year from age 62 to age 70 that you defer request.

For those with other sources of income during these years, this massive increase is hard to beat.

But this financial argument, as convincing, misses an even more important reason to wait as long as possible before retirement: People who work longer are less likely to experience cognitive decline. I don’t know about you, but that alone is enough to convince me to postpone retirement even if there’s no financial reason to do so.

This perceived benefit of postponing retirement was documented by a study published in the September 2021 issue of SSM – Population Health, a peer-reviewed journal. Titled “Does delaying retirement affect cognitive function?” its authors, from the Max Planck Institute for Demographic Research in Rostock, Germany, are Joe Mhairi Hale, Maarte Bijlsma and Angelo Lorenti .

Many have suspected for years that retirement accelerates cognitive decline. But the reality of proving it remains elusive, as doing so requires discerning the interactions between a multitude of different factors and trying to determine cause and effect.

For example, it is possible that people with more cognitive ability in the first place will be recruited into jobs that are more cognitively attractive and want to work for as long as possible. Although their cognitive function in the late 60s and early 70s will likely be higher than others of the same age who have retired, we do not know if it is because they decided to continue working or not. because their work was more cognitively appealing, or because they had more cognitive abilities in the first place, or some other factor altogether.

The authors of this new study used a new statistical technique, beyond the scope of this column, that can separate cause and effect. They applied this technique to data collected by Research on health and retirement (HRS) from the University of Michigan. HRS data is based on a biennial survey of approximately 20,000 Americans over the age of 50.

Researchers have found evidence of a strong cause-and-effect relationship between postponing retirement and improving cognitive function. Furthermore, they found that “deferred retirement benefits cognitive function across all genders, races/ethnics, education levels, and regardless of professional or non-professional occupational status.” .

Note carefully that the research doesn’t say that, if you or I postpone retirement, our cognitive function will actually increase. Instead, their conclusion is that postponing retirement slows the cognitive decline that occurs as we age. So, the improved cognitive function the study found was related to working longer in relative terms — compared with those who retired.

The conclusion of this study is consistent with Other research that I wrote before. Other research shows that death rates among men who choose to start receiving Social Security benefits as early as age 62 have increased markedly.

Also relevant are the findings about another study that I wrote before focuses on what happened in the Netherlands when the tax code was changed to encourage working over 62. The authors found that this change resulted in an increase in average life expectancy of up to two years.

Honestly, I’m surprised this recent research hasn’t received more attention in the retirement financial planning community. The only mention I’ve seen of it in the investment arena is in a recent issue of Journal of the American Association of Individual Investors.

Regardless, the implications are clear: When thinking about whether or not we should retire, we need to focus on more than just financial health.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be contacted at

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