Why Planning to Work Longer Won’t Fix the Retirement Gap
Retirement planning is a crucial aspect of financial stability, yet many Americans are finding it increasingly challenging to feel confident in their ability to retire comfortably. According to the latest Employee Benefit Research Institute (EBRI) survey, only 61% of workers report feeling confident that they will have enough money to live comfortably in retirement. This is a significant decrease from 67% the previous year and marks the lowest level of confidence in nearly a decade.
To bridge the gap between retirement savings and expenses, many individuals are considering the option of working longer or delaying their retirement. However, this plan may not always be feasible, as evidenced by the fact that 46% of people who retired in 2025 did so earlier than expected. Unforeseen circumstances such as rising costs, mounting debt, and uncertainty surrounding Social Security and Medicare can derail even the most well-intentioned retirement plans.
Financial experts caution that relying solely on the idea of working longer as a retirement strategy is risky. Pam Krueger, founder and CEO of Wealthramp, emphasizes that working longer should not be seen as a plan but rather as an assumption that is contingent on various factors aligning perfectly. Factors such as health issues, layoffs, or caregiving responsibilities can disrupt retirement plans, highlighting the importance of having a realistic backup plan in place.
A viable backup plan should not rely on a single solution but instead incorporate layers of flexibility into retirement preparations. This involves accurately assessing spending needs, diversifying sources of income, and stress-testing assumptions to identify potential gaps in the plan. Building flexibility allows individuals to navigate unexpected early retirements or market fluctuations with greater ease.
As retirement approaches, the focus shifts from wealth accumulation to wealth protection. This includes reducing debt, managing withdrawals prudently, and ensuring that investment portfolios can withstand market volatility. By adopting a gradual transition out of full-time work and considering alternative income streams, individuals can create a more sustainable and adaptable retirement plan.
For younger workers, starting early and planning for flexibility can provide a significant advantage. By building a foundation of financial stability and exploring diverse career options, individuals can establish a retirement strategy that is resilient to unforeseen challenges. Ultimately, the goal is to cultivate optionality and independence in retirement planning, allowing individuals to choose their path forward with confidence and security.
