Working Longer to Afford Retirement Proves Risky, Economists Warn

As Americans live longer and worry about stretching their savings, more workers are banking on postponing retirement to secure financial stability. Yet economists caution that the strategy carries significant risks, as more than half of retirees leave the workforce earlier than expected due to health or job-related issues, raising doubts about the reliability of working longer as a plan.

A July survey by insurance company F&G found that about 70% of U.S. workers have considered delaying retirement, with nearly half expressing concern they will not have enough money. Data from the Employee Benefit Research Institute showed that two in ten workers revised their retirement targets in 2024, most opting to retire later.

However, research from the Transamerica Center for Retirement Studies revealed that 58% of workers actually retire sooner than planned. Health problems accounted for 46% of early retirements, 43% were linked to employment challenges, and 20% were for family reasons. Only 21% retired early because they were financially prepared.

Man working remotely | Source: Pexels

Economist Teresa Ghilarducci of The New School noted that past downturns highlight the fragility of such strategies. “The 2008 recession kind of knocked all those assumptions about being able to work longer with enough money out of reality,” she said, pointing to job losses among workers in their 50s and 60s. She added, “You can’t [always] work longer because of age discrimination, and because the labor market may not want the skills that you’ve acquired.”

While life expectancy gains and the decline of traditional pensions have shifted retirement responsibility onto workers, younger generations are saving more aggressively. Yet experts warn that savings alone may not protect against medical expenses, market shocks, or job loss.