Planning to work in retirement? Don't count on it

Most Americans want to keep working in retirement. But few retirees actually work. 

That finding, from a new survey, illustrates a perennial gap between expectations and reality for American retirees.  

Roughly three-quarters of American workers plan to work for pay after they retire, according to the 2026 Retirement Confidence Survey from the Employee Benefit Research Institute. But only 31% of retirees are actually working, the survey found. 

In previous EBRI surveys going back to 1999, the finding is remarkably consistent. Year after year, between 70% and 80% of workers say they expect to continue working and drawing pay after they retire. Yet, the share of retirees who work has never ranged higher than 34%. 

False hopes about working in retirement speak to fundamental misunderstandings about both retirement and the labor market, experts say. 

Most of us don't retire on our own terms

Many American workers imagine themselves easing into retirement at their own pace: Cutting back their hours, working part-time or remotely, or staying on as a consultant to the company that once employed them full-time. 

Other workers imagine they will keep working full-time well into their retirement years, drawing a salary into their 70s, working until they drop.

In reality, though, most workers don’t get to retire on their own terms. Retirement often arrives suddenly and unexpectedly, triggered by health setbacks or corporate downsizing.  

And once you’re retired, returning to the workforce is seldom easy. 

“People do expect to gradually transition by reducing hours, but what ends up happening is, they end up stopping completely,” said Craig Copeland, director of wealth benefits research at EBRI, the research and education nonprofit.

In many cases, to keep working in retirement, “you’re going to have to find a whole new job,” Copeland said. “And it’s hard to find a whole new job when you’re older.” 

When work is part of your retirement plan

Working in retirement sounds like an oxymoron: In theory, you’re either working or retired, not both. 

The persistent desire to work in retirement, voiced in the EBRI survey and others, seems to reflect a pervasive hope among American workers that they can fund their retirement by continuing to work. 

Many American workers fear they aren’t saving enough. According to EBRI, roughly two-fifths of workers lack confidence in their financial security through retirement. Retirement confidence has been trending lower in recent years, a time of elevated inflation and myriad economic uncertainties.  

The EBRI survey draws on responses from 2,544 Americans in January. 

In the EBRI report, 75% of workers said they expect to leverage work as a source of income in retirement. Paid work ranks fourth among all expected income sources in retirement on the survey, after Social Security, workplace and personal retirement savings. 

“That’s one of the ways that they’re planning for retirement, and that is to continue to work and bring in income,” Copeland said. 

Yet, only 27% of current retirees report that they are drawing income from paid work.  

Working in retirement is harder than it sounds

One barrier to working in retirement is the relative scarcity of part-time work: Easing from a full-time to part-time schedule in a professional field is not as easy as it might sound, Copeland said.  

Another problem is the difficulty older Americans have in finding new jobs.  

“Re-entering employment can be very difficult when you’re an older jobseeker,” said Maura Porcelli, senior director of workforce at the National Council on Aging. 

Other retirement surveys show the extent to which Americans count on paid employment to fund their retirement.  

In a recent report from the Transamerica Center for Retirement Studies, 48% of pre-retirement Americans said they plan to work in retirement, while 32% said they did not, with another 19% unsure. 

“Many workers are planning to work in retirement for financial and healthy aging-related reasons,” said Catherine Collinson, CEO of the Transamerica Center. “However, the experience of retirees shows that life happens,” including health issues, family responsibilities or job loss that pushes people abruptly out of the workforce.

Some of the conflicting data, Collinson said, may reflect disparate societal attitudes about retirement. For example: If a corporate worker takes a retirement package, lives in retirement for a year or two and then lands a full-time job in a related field, is that person still retired? 

“Semantically, when people self-identify as ‘retired,’ are they supporting a societal expectation that they are no longer working?” she said. 

Here's why American retirees return to work

American retirees continue to work for a variety of reasons: to stay active and engaged, to postpone drawing Social Security or spending down retirement savings, to make ends meet. 

Recent evidence suggests more retirees are working out of necessity. A February report from AARP found that 7% of American retirees had recently “unretired,” reentering the labor force. The most common reason was to make more money. 

“I think right now we’re in this economic uncertainty zeitgeist,” said Carly Roszkowski, vice president of financial resilience programming at AARP. “People are worried about outliving their retirement savings. They’re worried about the cost of gas, the cost of groceries.” 

In a perfect world, Roszkowski said, retirees would work not because they need to, but because they want to. 

“A lot of people feel that they still have a lot left to give,” she said. “They want to be challenged, they want to feel purpose, they want to give back.”