The Reality of Retirement Is Changing—And the Workforce Is Feeling It

For decades, the idea of retirement at 65 was considered a given, a milestone that marked the end of a long career and the beginning of a life filled with relaxation and financial security. But today, that concept is unraveling, leaving many Americans questioning whether they will ever truly retire.

The median retirement age is steadily rising, and more Baby Boomers and even Gen Xers are working well into their 70s. While some choose to remain employed out of passion or purpose, for many, it’s not a choice at all—it’s a necessity. Rising costs, inadequate savings, and shifting government policies are forcing older Americans to stay in the workforce longer than expected.

“The fact that so many Americans are forced to work into their 70s should be a national scandal,” says Michael A. Scarpati, CEO of RetireUS. “It’s not just about rising costs or poor financial planning—it’s the result of a broken system that exploits workers and prioritizes corporate profits over retirement security.”

Why More Americans Are Working Later in Life

The number of Americans aged 70 and older who remain in the workforce has increased significantly. According to the Bureau of Labor Statistics, workers 70 and older made up 5.8% of the labor force in 2023, a sharp rise from previous decades. Some stay because they love their jobs. Others, however, are working because they simply can’t afford to stop.

While financial advisors often highlight the benefits of working longer—such as additional income and social engagement—the deeper truth is that many older workers are trapped in a system that makes traditional retirement nearly impossible.

Some of the biggest factors keeping older Americans in the workforce include:

• Insufficient Savings: Many people didn’t save enough—or weren’t able to—due to stagnant wages, high costs of living, or the shift away from pensions to self-managed 401(k) plans.
• Rising Healthcare Costs: Even with Medicare, healthcare expenses continue to climb, forcing retirees to keep working just to afford care.
• Social Security Uncertainty: With potential cuts looming and benefits often falling short of covering basic needs, many older adults feel they have no choice but to stay employed.
• Tax Burdens on Retirement Accounts: Government policies require retirees to start withdrawing from their retirement savings at age 75, leading to tax bills that can significantly erode their financial security.

“We’ve normalized the idea that individuals must bear the entire burden of financial survival while ignoring structural issues,” Scarpati notes. “People think they’re passing down their savings to their children, but they’re really passing down a massive tax bill.”

What Retirement Actually Looks Like Today

While many Americans still dream of a traditional retirement, reality tells a different story. The average Social Security benefit is around $1,907 per month, according to the Social Security Administration, which is often not enough to cover housing, healthcare, and daily expenses. Meanwhile, the median 401(k) balance for Americans aged 65 to 74 is just $164,000, according to the Federal Reserve, a number far lower than what most experts recommend.

For those without a pension, the prospect of retirement looks bleak. Without sufficient savings or guaranteed income, many older Americans find themselves working part-time or taking on gig work to make ends meet. Jobs that provide flexibility—such as retail, tutoring, or consulting—have become increasingly popular among older workers.

At the same time, some find working later in life fulfilling, helping them stay mentally and physically active. A 2023 Pew Research Center report found that while older workers earn slightly less than their younger counterparts, many continue working for social and emotional reasons. However, the distinction between choosing to work and being forced to work is crucial—and for too many, the latter is the reality.

Can Americans Ever Retire?

Scarpati argues that the only way to escape the cycle of indefinite work is through intentional financial planning and understanding how the system works before it’s too late.

“A systems-based approach to finances provides the clarity and resilience needed to avoid being forced to work longer than planned,” he explains. “Identify savings gaps, automate investments, and check in regularly to adjust for inflation and market conditions.”

But financial planning can only go so far in a system that increasingly shifts the burden of retirement security onto individuals. If wages don’t keep up with inflation, healthcare remains unaffordable, and Social Security continues to face funding issues, then working past 70 will no longer be an option—it will be the norm.

For those still in their working years, the key is to plan early, understand tax implications, and explore alternative income sources before reaching retirement age. But for the growing number of older Americans already facing financial insecurity, the path forward remains uncertain.

What’s clear is that the American dream of retirement at 65 is fading fast, and unless systemic changes occur, future generations may never experience the financial freedom their parents once expected.