As retirement continues to evolve in America, a significant portion of the population is grappling with the reality that fully leaving the workforce may never be within reach. A growing body of research reveals that the concept of retirement is no longer as clear-cut as it once was, with financial pressures, longer life expectancies, and shifting expectations reshaping the retirement landscape. Here’s a look at the changing face of retirement, and why millions of seniors are finding it increasingly difficult to live out their golden years in financial security.
The Growing Doubt Around Full Retirement
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A recent 2024 Everyday Wealth in America report, conducted by Greenwald Research for Edelman Financial Engines, paints a worrying picture for many workers. The study shows that nearly a third of Americans—33%—doubt they will ever fully retire, while a small but significant portion, 6%, believe they will need to continue working indefinitely. This shift is a stark contrast to previous generations, where retirement was seen as a defined life stage, with individuals exiting the workforce at a set age.
Historically, retirement was considered a life milestone, signaling the end of a career and the beginning of leisure. A Gallup survey from 2002 to 2007 indicated that 41% of adults aged 60 to 64 had already retired, with this number rising to 76% for those aged 65 to 69. However, between 2016 and 2022, these figures dropped noticeably, with only 32% of individuals aged 60 to 64 retiring, and 70% of those between 65 and 69 leaving the workforce.
Why More Seniors Are Staying in the Workforce
A variety of factors are driving this trend, including financial insecurity and changing perceptions of what retirement should look like. The Pew Research Center found that approximately 20% of Americans aged 65 and older were still working in 2023. This marked a significant increase from previous decades.
One of the most striking changes is the rise in the expected retirement age. In 1995, non-retirees anticipated retiring at around 60 years old. Today, that number has increased to 66—exceeding the official full retirement age for Social Security. Economic pressures, such as inflation, rising healthcare costs, and stagnant wages, are making it more difficult for many to build adequate retirement savings, forcing older Americans to stay in the workforce longer than they initially planned.
A Phased Approach to Retirement
Rather than a complete exit from the workforce, many older workers are adopting a phased retirement approach. This involves gradually reducing work hours or responsibilities rather than stopping altogether. According to the WTW 2024 Global Benefits Attitudes Survey, 61% of those transitioning to retirement have chosen to reduce their working hours, and 41% have taken on fewer responsibilities at work.
Financial needs are not the only factor driving this decision. As Jim Davis, a senior wealth manager at Aspen Wealth Management, points out, retirees today are often motivated by more than just financial concerns. “Many people are working longer because they enjoy staying mentally and socially active,” Davis says. The result is a shift away from viewing retirement as a distinct, full-stop event. Instead, many seniors are choosing to stay engaged in the workforce for as long as possible.
Redefining the Retirement Dream
Not only are Americans changing when they retire, but they are also redefining what retirement looks like. The Edelman study shows that nearly 40% of workers envision a retirement drastically different from previous generations. For many, this means an active, adventurous lifestyle, with 42% planning to increase their physical activity, 39% seeking more travel and adventure, and 24% hoping to adopt a more nomadic lifestyle in their retirement years.
However, the desire for an adventurous and active post-work life often clashes with the financial realities many retirees face. While 65% of respondents in the Edelman survey expressed confidence in their ability to fund their dream retirement, 35% admitted they might not be able to afford the lifestyle they hoped for. Financial insecurity is an increasingly common theme, especially in the face of rising living costs and economic uncertainty.
Financial Insecurity and the Midlife Retirement Crisis
For many Americans, the financial gap between their savings and the cost of retirement is widening. Prudential Investments found that workers entering retirement are often significantly underprepared. The median savings for 55-year-olds was only $47,950—far below the recommended amount, which is typically eight times one’s annual income.
Economic pressures like inflation have caused many older workers to delay retirement altogether. The Prudential study found that one-third of 55-year-olds had postponed their retirement due to rising costs. Likewise, 43% of 65-year-olds and 25% of 75-year-olds had also delayed retiring for financial reasons.
Many retirees are turning to part-time work as a way to make up for the shortfall in savings. Nearly half of 55-year-olds, and 25% of 65-year-olds, expect to work part-time in retirement, while a smaller percentage of 75-year-olds plan to do the same. This part-time work is seen as a necessary strategy for maintaining financial security while still enjoying some aspects of retirement.
Conclusion: A New Reality for American Retirees
The concept of retirement is undergoing a profound transformation. Gone are the days when reaching a certain age meant automatically leaving the workforce. Today, financial constraints, longer life expectancies, and changing priorities are reshaping retirement for millions of Americans. While many seniors still hope to enjoy an active and fulfilling post-work life, achieving this goal requires careful financial planning and, in many cases, a reevaluation of what retirement will look like.
For many, the challenge is not just reaching retirement, but securing the financial stability needed to live out their golden years comfortably. As more Americans delay retirement and work part-time, the traditional notion of retirement may continue to evolve in the years ahead.