More retirement plans to include this feature: A job of some sort

Odds are if you are in your 50s or early 60s you have gone online and plugged some numbers into retirement planning calculators. The exercise is no longer the game it might have been early in your career. The numbers are better than they were a decade ago, but your retirement savings probably still seem inadequate.

Cheer up. Most older adults no longer follow the path of abruptly going from full-time work to full-time retirement and living off their accumulated savings plus Social Security. Instead, they continue to earn an income, typically through encore careers, part-time work, flexible jobs, phased retirement and self-employment.

The personal finances of delaying full-time retirement for the typical worker are compelling. Most important, a paycheck makes it practical to delay filing for Social Security. The benefit is more than 75 percent higher at age 70 (the latest age for filing) than at age 62 (the youngest age to file). You can continue contributing to savings while working and your portfolio keeps compounding longer.

Take this example drawn from a recent scholarly paper, "The Power of Working Longer." Older workers 10 years from retirement who work one month longer at the end of their careers can get the same increase in their retirement income as they could by adding 1 percentage point to their retirement savings rate over those 10 years.

Here's another suggestive illustration from 2004, this time by an economist at the Congressional Budget Office. He assumed a married couple in their early sixties earning $77,000 a year. In retirement they will need almost $47,000 a year to replace 80 percent of their pre-retirement after-tax income. (Like all money guideposts, that 80 percent figure should be adjusted to individual circumstances and goals.) They live to their average life expectancy.

If both retire at 62 and filed for Social Security, they would need a portfolio of some $511,000 to buy a "joint and 50 percent survivor" annuity to generate the income stream they want. If the couple waits until age 66 to retire some $298,000 in savings is enough to fund their lifestyle. Retire at 70? Savings of $118,000 will do the trick.

A critical question for anyone nearing retirement is "what do I want to do next" that will also generate some income? There will be a time to say goodbye to your colleagues for the last time. But you may want to continue working, hopefully finding a job or self-employment that offers both meaning and money.

Chris Farrell is senior economics contributor, "Marketplace", commentator, Minnesota Public Radio.