Employer Cost Comparison
The True Cost of a Delayed Retirement — Age 40 vs. Age 65
The insight that changes the conversation
The retirement plan match costs nearly the same at both ages. The entire cost gap is driven by salary seniority premium and — for self-funded employers — healthcare claims. Increasing the match by 1–2% costs $650–$1,300 per younger employee per year. That is a fraction of the $36,000–$47,000 annual cost of one delayed retirement.
Replacement Hire Salary
$
Age 35–40 median
Delayed Retiree Salary
$
Age 62–65 median
Delayed Retirees at Your Org
Estimated count
Self-Funded / Self-Insured Plan
Toggle on to reveal the healthcare cost differential for self-funded employers
Annual Gap
$36K
per delayed
retiree
retiree
Org Cost
$179K
5 employees
per year
per year
The Retirement Plan Argument
Cost of 1% match increase
$650
per younger employee / year
Cost of one delayed retirement
$36K
per year in excess employer cost
Break-even ratio
55:1
return on match investment
For every dollar invested in a stronger retirement match, the employer avoids 55 dollars in delayed retirement costs.
Sources: Salary benchmarks — BLS Median Weekly Earnings by Age (Q4 2024). Healthcare premiums — KFF Employer Health Benefits Survey 2024. Self-funded claims — Health Care Cost Institute 2025, West Health 2025. Delayed retirement cost — Prudential Financial (2019), Principal Financial (2025). PTO accrual based on SHRM national averages.