3 Signs You Should Wait 1 More Year to Retire

Key Points

• While it's a hard thing to postpone retirement for years, waiting 12 months may be doable.

• Delaying retirement by a year could make it possible to pay off lingering debt.

• It might also save you money on health insurance costs and help you claim Social Security more strategically.

• The $23,760 Social Security bonus most retirees completely overlook ›

It's not an unusual thing to choose a retirement date at some point in your career. You may decide to leave the workforce at 60, 62, 65, or at another age that works for you.

But one thing you may want to do is maintain some flexibility in the context of those plans -- and postpone them just a bit. Here are three signs that retiring one year later than planned could work to your benefit.

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1. You're still carrying some high-interest debt

Not everyone manages to retire completely debt-free. It's not so unusual to owe money on a mortgage in retirement. And if you have to replace a car, you may have auto loan payments to manage.

But if you're still carrying high-interest debt, like credit card or unsecured loan balances, you may end up having to spend a large chunk of your retirement income on it. That could leave you feeling stressed financially month after month. If you wait a year to retire, you might manage to chip away at more of your high-interest debt -- or eliminate in completely.

2. You're not old enough for Medicare

Healthcare might end up being one of your biggest expenses in retirement. And if you retire before you're eligible for Medicare, which generally won't happen until you're 65, you may find that the cost of putting health insurance in place is astronomical.

Depending on your age, waiting another year to retire could mean avoiding a gap in coverage. If you're 64, for example, staying employed and on your company's health plan means you should be able to move over to Medicare without having to buy insurance on your own.

But even if that's not the case, waiting a year to retire could still do good things for your finances.

Let's say you're 62. That gives you a three-year gap until Medicare -- and a three-year period where you may have to buy your own health insurance. If you work even one more year and get health coverage through your job, you won't have to face three years of premium costs -- just two.

3. You haven't figured out when to claim Social Security -- and want to get more from those benefits

Social Security could end up playing a big role in your retirement finances. If you don't yet have a claiming strategy, it could pay to wait on retirement until you have a better understanding of when to take benefits.

Working one more year might also help you get more out of Social Security.

Let's say you're 62. You can claim Social Security, but your monthly benefits will be reduced by about 30% compared to waiting until full retirement age, which would be 67 for you. Working one more year and waiting on Social Security during that time could mean facing a 25% reduction in your monthly checks instead, which is better than 30%.

It's natural to set a retirement date and want to stick to it. But if these signs apply to you, you may be better off delaying that milestone a bit. Twelve extra months in the workforce could make it possible to shed costly debt, save on health insurance premiums, and claim Social Security more strategically.

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