Many US Workers May Delay Retirement: Why & What This Means
Published On: September 9th, 2024
As financial uncertainty grows, a significant number of American workers are reconsidering their retirement plans, with many choosing to delay their exit from the workforce. Several factors, including economic pressures, inadequate savings, and concerns about Social Security, are driving this trend, raising questions about the broader impact on the economy and future generations.
- 82% of workers are considering delaying their retirement due to financial concerns, according to a LiveCareer survey
- 42% of workers feel confident about having enough money to live comfortably in retirement, with up to 71% planning to continue working part-time after retirement
- 54% of retirees have less than $100,000 saved up, which is the minimum amount they report needing to cover expenses. Thus, a similar percentage of workers fear retirement more than being fired or illness
- The average worker or retiree has $88,400 in savings, well below the recommended amount needed to retire comfortably
The trend of delayed retirement is largely driven by financial anxiety among American workers. Many are grappling with the reality of insufficient savings, rising inflation, and uncertainties surrounding the future of Social Security. Another recent survey reveals that while a significant portion of workers plan to retire between the ages of 65 and 70, many are forced to retire earlier than anticipated due to health or job-related issues, often unprepared financially for the transition.
For those still in the workforce, the prospect of delaying retirement is not just about continuing to earn a paycheck. It’s also about ensuring they have adequate savings to last through what could be decades of retirement. Inflation, healthcare costs, and housing expenses are top concerns, with many fearing they won’t be able to maintain their standard of living once they stop working.
Broader implications
Delaying retirement has ripple effects throughout the economy. For younger generations, particularly Millennials and Gen Z, the extended presence of older workers in the labor market can limit job advancement opportunities, keeping them in lower-paying roles longer. This, in turn, can affect their ability to save for their own retirements, potentially creating a cycle of delayed retirements across generations.
The delay in retirement also places pressure on Social Security, as more people remain in the workforce longer, contributing to and drawing from the system simultaneously. Nearly 87% of Americans believe that immediate action is needed from Congress to address Social Security’s funding issues, reflecting widespread concern about the sustainability of this critical safety net.
The growing trend of delayed retirements among US workers, along with associated factors like a cooling labor market, highlights deeper economic challenges and underscores the need for more robust retirement planning and policy reforms. Without significant changes, both current and future retirees may continue to face financial insecurities that could reshape the traditional retirement landscape. For now, the best advice for workers is to stay informed, make proactive financial decisions, and plan as much as possible to mitigate the impact of these uncertainties on their retirement years.