If you're working past 55, there's a question worth answering before anything else. Are you doing it because you want to, or because you haven't sat down and done the math?
Both answers are fine. The advice changes depending on which one is true for you. If you like your job, you're healthy, and the paycheck is a bonus, there are financial moves available to you that exist only while you're still earning income, and a couple of them have hard expiration dates. If you're tired and you assume you need a few more years before you can stop, the numbers may look different from the feeling.
The catch-up contributions that expire at 64
If you're over 50, you can put an extra $8,000 a year into your 401(k) on top of the standard $22,500 limit. That's $32,500 a year in total. Plenty of people know the catch-up exists. Fewer actually use it, and leaving that money uncontributed gives up one of the easiest tax-advantaged moves available to you.
Starting in 2025 there's a second layer. If you're between 60 and 63, Secure Act 2.0 created a super catch-up contribution that raises your total limit to $35,750 a year, an extra $3,250 above what someone over 50 gets. The window runs four years, ages 60, 61, 62, and 63. Once you turn 64 it closes and the higher limit is no longer available.
Across those four years you could move up to $143,000 into your 401(k), and more if your employer matches on top of that. This provision didn't exist before 2025, so anyone in that age range is sitting in a savings window nobody before them had access to.
One caveat. The super catch-up is plan optional, which means your employer has to adopt it. If yours hasn't, ask HR about it. They may not have heard of it, and adopting it would help everyone in the organization who's in that age band.
Don't claim Social Security while you're earning a good wage
A lot of people assume they can start Social Security at 62, keep working, and pocket that check alongside a paycheck. It doesn't work that way. If you claim before 67 while you're still earning income, your benefit gets reduced.
The formula is simple. For every $2 you earn above $24,480 a year, you lose $1 of Social Security. Say your earned income is $64,480. That's $40,000 over the threshold, so you're giving up $20,000 in benefits. If your monthly benefit is $2,000, that's $24,000 a year, and after the reduction you're collecting $4,000.
The money doesn't disappear permanently. Once you reach full retirement age, the Social Security Administration recalculates your benefit based on what you gave up during those working years. In the short term, though, claiming early while you're making a decent salary defeats the purpose of claiming at all. Wait until you actually need the income or until you reach full retirement age.
The tax window you shorten by working longer
The best stretch for Roth conversions is after you stop working and before required minimum distributions start at 73. Your income drops in those years and your tax bracket drops with it, so you can move more out of a 401(k) or traditional account into a Roth.
Work until full retirement age at 67 and you go from roughly 11 years of conversion room down to about six. Fewer years means converting more money each year, which can push you into a higher bracket. Over a lifetime that can cost tens of thousands in extra taxes, purely because the window got shorter.
Medicare is tied to the same timing. Your Part B and Part D premiums are based on your income from two years ago. If you're earning $120,000 at 63, that's the income that sets your premiums when you enroll at 65. IRMAA surcharges start at $106,000 for single filers and can add thousands a year. Most people find out when the first bill arrives and it's far higher than expected, and by then the income that caused it is two years in the past.
None of this means you should quit tomorrow. It means planning the exit with intention. Maxing out a Roth 401(k) instead of a traditional one in your last couple of working years, and choosing the date you flip the switch, are small moves that make a big difference.
What one more year of work is actually worth
Now for the people still working because it feels necessary. Here's the math a lot of people haven't done. Say you earn $75,000 a year. Account for taxes, commuting, lunches at work, and clothes for work, and what you actually take home is closer to $45,000 or $50,000.
Now assume something unrealistic in your favor. You save 100% of that $50,000 and spend nothing on living expenses, food, entertainment, or healthcare. Withdraw 4% a year, which is the standard advice, and that extra year of work buys you $2,000 a year in retirement. About $167 a month.
That's the number, and that's the best case. Is $167 a month worth another year of a job that's wearing you down? Maybe it is. The point is to decide with a clear picture of what you're working toward instead of a vague feeling.
The variables that matter are a short list. What you have saved, what your monthly expenses are, whether you have a pension, when you plan to take Social Security, and what you'll do for healthcare before Medicare kicks in at 65.
Healthcare is a solvable problem
That last one is the big one. Retire at 62 and you're covering three years of health insurance before Medicare starts. Private coverage in your early sixties runs between $800 and $1,500 a month depending on where you live and what subsidies you qualify for. Over three years that's $30,000 to $55,000. It's a real number and I'm not going to pretend it's small.
Once you know what it is, you can plan for it. Set that amount aside before you leave. Take a part-time job with benefits to help cover the gap. Get a real quote from a broker so you know the actual cost before you make any decisions. Health insurance shouldn't be the only reason you stay in a job that's making you miserable.
Retirement doesn't have to be all or nothing
There's a lot of space between grinding at a demanding job until 65 and stopping cold turkey.
You could step down into a role with less responsibility. That can mean fewer direct reports and less travel, and the pay cut is often smaller than you'd expect for how much pressure comes off. You could go part-time. Some employers will let you work three or four days a week, especially if you carry institutional knowledge they don't want to lose, and you may keep your health benefits while getting most of your week back.
Remote work is another version of the same idea. If commuting and office politics are what's burning you out, a remote position can feel like a completely different job. Or you switch to something new at 57 or 60. You've got decades of transferable skills, and a lower paying job you actually enjoy doesn't wear on you the way the old one did. The goal at this stage is an arrangement that stops trading your health and your best years for diminishing returns.
About 41% of workers over 50 say they're still working out of financial necessity. It's worth asking whether that's the math talking or an assumption nobody has checked. The decade between 55 and 65 is too important to spend on autopilot. If the math says you need a few more years, that's okay. You still get to decide what those years look like, and they can be part-time, remote, and a lot less stressful than what you're doing now.