Reasons to delay retirement

Retirement is often seen as a fixed destination, a date circled on the calendar after decades of work. But in reality, the timing of retirement can be one of the most important moments to improve one’s long-term financial outcomes.

Delaying retirement, even for a short period, can significantly strengthen one’s retirement income, reduce financial risk, and increase peace of mind.

Here are some of the most common and sensible reasons why delaying retirement may be worth considering.

1. Will your retirement income comfortably support the lifestyle you want?

If your projected retirement income only covers your monthly expenses, retirement may feel stressful, rather than freeing. Delaying retirement allows:

• Continued contributions to your retirement fund
• More time for investment growth
• A higher sustainable income for life

Even an extra 6–24 months of saving can meaningfully improve long-term income sustainability.

2. Is the market up or down?

Retiring during or shortly after a market downturn can permanently reduce the income your savings can support. This is known as sequence-of-returns risk. By delaying retirement, you give your investments time to recover, reducing the risk of locking in losses at the worst possible moment.

3. Do you still have a lot of debt?

Entering retirement with short-term or high-interest debt places immediate strain on your income. Delaying retirement can help you:

• Settle outstanding debt
• Reduce monthly expenses
• Improve cash flow sustainability

4. Have you seen the cost of healthcare lately?

Medical expenses typically rise in retirement, and medical aid premiums increase faster than inflation. If you are unsure about being able to afford healthcare, additional time to build reserves can provide an essential buffer against future costs and protect your retirement income from unexpected shocks.

5. Have you recently adjusted your investment strategy?

Many people approach retirement with portfolios that are either too aggressive or too conservative. Delaying retirement allows time to:

• Realign investments for income sustainability
• Reduce unnecessary volatility
• Ensure assets are positioned to beat inflation over time

These adjustments are best made gradually, not under pressure.

6. You haven’t finalised key retirement decisions

Decisions such as choosing between annuity types or setting an income drawdown rate can be difficult to reverse. If you feel rushed or uncertain, delaying retirement can buy you time to make informed, confident choices, often with better long-term outcomes.

7. Why not improve your tax efficiency

The timing of retirement can materially affect tax outcomes. Additional working years may allow:

• Continued tax-deductible contributions
• Better use of tax-free lump sum allowances
• More efficient structuring of retirement income

Small tax efficiencies compound over time.

8. You’re not emotionally ready yet

Let’s face it; retirement readiness isn’t only financial. Purpose, routine, and identity all play a role in long-term wellbeing. If you’re uncertain about how you’ll spend your time or how your spending patterns may change, delaying retirement can help ensure the transition is positive – not disorienting.

Delaying retirement is not a setback or a failure. In many cases, it is a strategic decision that can help lead you to greater certainty, resilience, and confidence in retirement.