Is Working Forever Becoming the New American Retirement Plan?

With the cost of living on the rise, many Americans are working beyond retirement age in the USA.

For generations, Americans dreamed of the day they’d turn 65, hang up their work boots, and sail into the golden years. But in today’s reality, many Americans are finding that traditional retirement is more out of reach than ever. The reasons for this shift are complex, involving everything from economic pressures to changing social expectations, and even the desire for longer, more active lives. 

Life changed drastically during the last 30 years or so, and the post-pandemic world is resulting to more and more demanding from citizens around the globe, and in particular for the Americans. While the job market is still resourceful and full of opportunities, many Americans feel pressured to work the more and more.

Many of them will probably never retire completely. While many people enjoy working, and they are aware that they don't want to stop, many others (maybe the most part) are forced to keep on working after their retirement to bear with the increasingly high costs of living. 

But why exactly is like that, and what are the causes that brought to these results ?

Let’s take a deeper look into what’s driving this change and what it means for Americans' financial futures.

Why Are More Americans Working Beyond 65?

The data is eye-opening. According to the Transamerica Center for Retirement Studies, nearly half of middle-class Americans expect to work well past the age of 65. And while that might sound voluntary, around 80% of them cite economic pressure as the main reason for staying in the workforce.

The challenge becomes especially clear when we look at retirement savings. Today, the median retirement account for a middle-class household in the U.S. is around $66,000, far short of the $1.5 million experts say is needed for a comfortable retirement.

In fact, a recent study by Retire Guide shows that more than 40% of people between the ages of 55 and 64 don’t have a retirement savings account at all. These data appear to be very surprising if we think about the reputation of the United States as a world's leading economy. 

Why this gap? Several factors are at play: wages that haven’t kept up with inflation, longer lifespans, and healthcare costs that are still rising despite recent policy changes. And it’s not just about individual finances; broader economic changes are also making retirement less attainable.

The Slowdown in Economic Growth

A big part of this financial squeeze comes from slower economic growth. Since 2000, U.S. GDP growth has dropped from an average of 3.2% annually to about 2%. This slowdown has hit middle-income Americans especially hard, as wages have stagnated and job growth has slowed.

Adding to the strain, government-driven jobs have surged in recent years. In September alone, 785,000 new government jobs were created, but economist Peter Schiff points out that these roles are often funded through taxpayer dollars or inflation, not from private-sector productivity. So, while these jobs can provide income, they don’t necessarily add to the overall economic output, meaning they don’t contribute to broader financial security.

Returning to Work: The “Unretirement” Wave

One of the most striking trends today is the increasing number of older Americans—especially men—who are heading back to work.

Last month alone, 144,000 men over the age of 70 rejoined the workforce, bringing the total number of working men in this age group to a record 3.15 million. And this trend is also visible for those aged 65 and older, whose labor participation rate has nearly doubled since the late 1980s.

This reversal of the so-called “great retirement wave” that started during the pandemic suggests that many men of this age group are finding retirement unfeasible or unfulfilling. Carly Roszkowski from AARP notes that many of these returning workers aren’t entering the workforce for the first time—they’re coming back because retirement didn’t offer the financial or social stability they’d hoped for.

But there’s a positive side to this trend as well: many of them report returning to work for the structure, purpose, and social engagement that a job provides. Many of them express pleasure and fulfillment given by the feeling of still being active and useful for society. 

A recent survey by T. Rowe Price revealed that while 48% of retirees said they returned to work due to financial necessity, a close 45% said they missed the social and emotional benefits of working.

Financial Pressures Hitting Older Workers

For many men of 60+ age group, Social Security and Medicare provide a partial safety net, but they don’t cover everything. 

The Social Security Administration reports that the average monthly Social Security payment was $1,905 in 2023—enough for basic needs, perhaps, but not nearly enough for most retirees in higher-cost areas.

Meanwhile, inflation has pushed up the cost of living, even for basics like food and rent. Although Social Security adjusts for inflation, these adjustments rarely keep pace with actual rising costs, leaving retirees with less purchasing power. As a consequence, this financial strain is especially felt among older workers who lack other forms of retirement savings, such as 401(k) accounts or pensions.

The Role of Real Assets in Modern Retirement Planning

In response to these financial pressures, many Americans are looking beyond traditional retirement plans and considering real assets like gold and silver to help preserve their wealth. Thus, commodities have historically been seen as a hedge against inflation, and for good reason: since 2001, The price of gold has increased by more than 800%. In fact, recent reports by Bloomberg and Bank of America suggest that gold may now be a better long-term “safe haven” than U.S. Treasuries.

Bank of America even recommends adjusting the classic 60-40 investment portfolio (60% stocks, 40% bonds) to include more real assets like Commodities and precious metals. This change reflects the reality that, in a high-inflation, high-interest-rate environment, traditional investments may not provide the same level of security they once did.

For many, adding assets like gold or silver to a retirement portfolio offers a way to guard against economic uncertainty and protect long-term savings.

Social and Psychological Benefits of Staying in the Workforce

While money is often the main reason people keep working, it’s far from the only one. As already said, many older Americans find that work provides valuable social and emotional benefits that are hard to replace in retirement.

Social isolation is a common challenge for retirees, and a job can provide structure, daily social interaction, and a sense of purpose.

Kelly LaVigne, VP of consumer insights at Allianz, emphasizes the importance of a well-rounded retirement plan. “You need a strategy that covers not only your finances but also your lifestyle after leaving the workforce,” LaVigne says. Without a plan for how to spend their time, retirees often feel disconnected, sometimes even choosing to return to work out of sheer boredom.

Studies consistently show that having a routine and a community can boost mental and emotional well-being, which has become a major factor in why many older people return to work.

The Need for a New Approach to Retirement Planning

Today, preparing for retirement means more than just putting money into an account—it requires a holistic strategy that considers the unique challenges of modern life. Therefore, for many Americans, this means planning for a gradual transition into retirement rather than an abrupt stop. According to Allianz’s recent survey, nearly half of working Americans now expect to phase into retirement slowly, balancing part-time work with early withdrawals from retirement accounts.

This more flexible approach can help close the financial gap for those who haven’t saved enough, while allowing them to stay connected to their communities and maintain a sense of purpose. Experts like LaVigne recommend setting realistic goals, diversifying investments to include real assets, and focusing on both financial and lifestyle planning for a well-rounded retirement strategy.

Challenges Facing the Modern Retiree

It’s also worth noting that not everyone has the choice to keep working. Many low-income seniors work physically demanding jobs—think caregiving, construction, or transportation—that become nearly impossible to continue with age. Unfortunately, these workers are also less likely to have saved enough for retirement or have access to employer-sponsored retirement plans. According to the Bureau of Labor Statistics, more than 40% of Americans aged 55-64 in physically demanding jobs have little to no retirement savings, and their access to Social Security may be limited if they are forced to leave work due to health issues.

Economist Kathryn Edwards emphasizes that while many Americans are working longer out of choice, others continue working out of sheer necessity, often in tough jobs with few protections. For those in low-paying roles, there’s also less concern about age discrimination, making these positions more accessible but often less rewarding.

Looking Ahead: Rethinking Retirement

So what does retirement look like for Americans today? For some, it’s a gradual transition that involves working part-time or pursuing flexible, passion-driven roles that allow them to stay engaged and financially stable. For others, retirement simply means continuing to work, whether because of financial necessity or social desire.

In conclusion, the future of retirement may be less about leaving the workforce entirely and more about rethinking how we balance work, savings, and lifestyle.

For those preparing for this new kind of retirement, there are a few takeaways. First, start planning early, even if it’s just small, consistent contributions to a retirement fund. Second, consider diversifying into real assets like gold, which have shown resilience in volatile economic conditions.

Lastly, focus on creating a flexible retirement plan that allows for gradual changes rather than abrupt transitions.

Retirement may be evolving, but with the right strategy, it’s still possible to create a plan that offers both financial security and personal fulfillment. Whether that means a full retirement or simply a change in how and when we work, the goal is the same: a comfortable, satisfying life after years of hard work.