Americans Prepare to Keep Working Through Retirement

The golden years might be over, as more and more Americans prepare to keep working through their retirement.

In an Allianz Life study, 63 percent of respondents said they would likely continue working at least part-time during their retirement to supplement their incomes, and 15 percent said they couldn't see themselves ever fully retiring.

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"In the past, retirement started abruptly on your last day of work, but that idea is changing," Kelly LaVigne, VP of Consumer Insights, Allianz Life, said in a statement. "Many Americans are thinking about slowly working less and less as they age. That's an important change for creating a retirement financial strategy that will affect when you start drawing down on retirement assets and how much you withdraw."

The retirement anxiety is more pronounced among millennials and Gen X compared with baby boomers. While 59 percent of boomers said they were prepared to continue working part-time, 64 percent of Gen X and millennials said the same.

"The unfortunate reality for many Americans is part-time work in retirement is going to increasingly be more of a requirement than an option," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.

Beene said prices of essential items are at all-time highs, and retiring Americans are saddled with more debt than ever. While social safety-net programs like Social Security exist, they likely will not cover all the expenses incurred after ending a full-time career.

Both Social Security and Medicare's funding are predicted to become insolvent by the 2030s, and seniors could receive reduced benefits or coverage if nothing is done to address this.

Historically, Americans have been covered by pension plans, which often allotted them the bulk of the money they needed for retirement. While roughly half of private sector workers had pension plans in the mid-1980s, that number was just 15 percent in 2022.

Still, Beene said there are ways to prepare for retirement even amid the high inflation and economic uncertainty.

"The best way to prepare for retirement and potentially avoid part-time work is more saving and investing," Beene said. "Prices have never been higher, but there have also never been so many investment products to help workers gather a good nest egg for retirement."

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Roth IRAs remain tax-free upon retirement, and health savings accounts also help seniors cover both their retirement and health care after they leave a career.

Kevin Thompson, a financial expert and the founder/CEO of 9i Capital Group, said for most retirees, the concern might not necessarily be running out of money. Instead, it's facing a sudden shock to their fixed spending, like a health emergency.

"It is important to speak with someone, maybe a financial professional, that can model in any type of shock and build in contingencies to negate any sudden spending shock," Thompson told Newsweek.

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While the only solution to retirement woes is to save more money, Thompson said that remains out of reach for many.

"There is a large swath of individuals that truly cannot save due to the wages they are making in the service industry," he said. "The answer is truly, make more money, or spend less, but it is not that simple. The cost of everyday items continues to rise, yet wages are not rising commensurately."