Working past the traditional retirement age of 65 and continuing to contribute to a 401(k) plan increase the opportunity for participants to have sufficient retirement income, according to new analysis by the Employment Benefit Research Institute.
“One of the factors that makes a major difference in the percentage of households satisfying the retirement income adequacy thresholds at any retirement age is whether the worker is still participating in a defined contribution plan after age 65,” said an executive summary of the analysis based on economic models. “This factor results in at least a 10-percentage-point difference in the majority of the retirement age/income combinations investigated.”
The EBRI analysis looked at four different income levels as well as seven different retirement ages ranging from 65 to 84.
The key to improving the chances for adequate retirement income is working and taking advantage of 401(k) opportunities, including, when possible, an employer match, Jack VanDerhei, EBRI’s research director and a co-author of the analysis, said in an interview. “For example, if people retire at 69, they get four more years (of contributions) and they can get the employer match,” he said.