TY - JOUR T1 - Practical Applications of The Illusory Benefit of Working Longer on Retirement Financial Preparedness: Rethinking Advice That Working Longer Increases Retirement Income JF - Practical Applications DO - 10.3905/pa.2022.pa507 SP - pa.2022.pa507 AU - Teresa Ghilarducci AU - Michael Papadopoulos AU - Anthony Webb Y1 - 2022/08/03 UR - https://pm-research.com/content/early/2022/08/01/pa.2022.pa507.abstract N2 - In The Illusory Benefit of Working Longer on Retirement Financial Preparedness: Rethinking Advice That Working Longer Increases Retirement Income, from the Summer 2022 issue of The Journal of Retirement, authors Teresa Ghilarducci (of The New School), Michael Papadopoulos (of the New York City Office of Labor Policy and Standards), and Anthony Webb (of The New School) challenge assumptions that underpin popular retirement-planning advice. They find that, despite significant financial incentives for individuals to delay the commencement of Social Security benefits past their “full retirement age” (FRA), the great majority elect to commence receiving benefits upon reaching their FRA. This finding calls into question key assumptions underlying both key public policies and financial advice prepared for clients.The study analyzes national survey data and finds that only 45% of Americans who work until age 70 are prepared for retirement. Working from 62 to 70 increases preparedness by only 22 percentage points because nearly everyone (working and nonworking) commences receiving Social Security benefits by age 66. Almost no one waits until 70 to receive the full “delayed retirement credit” (DRC). The assumptions in earlier research about individual behavior have proven to be incorrect. Financial advisors should reconsider whether advising clients to work longer for higher retirement income is realistic. ER -