Americans are increasingly relying on working longer to make up for the retirement deficit. But new data suggests the strategy may be less reliable than it seems.
Retirement confidence is on the decline, with only 61% of workers reporting that they feel confident they will have enough money to live comfortably later in life, according to a recent Employee Benefit Research Institute (EBRI) survey. That’s down from 67% last year and the lowest rate in nearly a decade.
To close the gap, many workers plan to delay retirement or continue working. The problem? That plan doesn’t last. According to the survey, nearly half of retirees by 2025 – 46% – say they left the workforce earlier than expected, underscoring just how elusive the end of the workforce can be.
Rising costs, mounting debt and uncertainty about the future of Social Security and Medicare only add to the pressure, leaving many workers with a long-term plan to work, but no clear savings if they can’t.
Why working long hours isn’t really a plan
The disconnect between expectations and reality is something financial experts say employees often underestimate.
“The biggest problem is that people treat longevity as if it’s a program when it’s really just an afterthought,” Pam Krueger, co-founder and CEO at Wealthramp, told Money. “And it’s an assumption that depends on a lot of things going well.”
For many employees, the end of the job is not something they have control over. Health obstacles, layoffs or caregiving responsibilities can suddenly change even well-laid plans, and by 2025, factors like these were the biggest cause of early retirement, according to EBRI.
That risk comes from the labor market, too. Data from the US Bureau of Labor Statistics shows that older workers who lose their jobs are less likely to be rehired, and reemployment rates drop sharply after age 55.
“The real danger isn’t just that you quit early. It’s that you build your entire system around something you can’t fully control,” Krueger said. “Really ask: Is this what I want to aim for as my Plan A?”
In other words, working longer is not a retirement strategy; it is a gambling game. And it’s one that needs a real Plan B.
What a realistic backup plan looks like
A true backup plan, financial experts say, is not about choosing an alternative but about building flexibility into how retirement actually works.
“A good Plan B is not one big solution. It’s multi-level,” Krueger said. That starts with understanding real spending needs, not estimates, and identifying where the budget can really be adjusted if retirement comes earlier than expected.
From there, it’s about building multiple sources of income — including Social Security, investment withdrawals and, for some, a part-time job option.
Some of the preparations also come down to stress-testing considerations: What happens if retirement comes earlier than expected, or if the markets don’t perform as planned in the early years? That kind of situational planning can reveal gaps long before they become real-life problems.
However, building that kind of flexibility requires preparation, not just hoping things will work out.
“That’s really the goal: choice,” Krueger said. “You don’t want to be in a situation where you are forced to continue working, you want to be able to choose.”
He often encourages employees to think less about standing still and think about a gradual transition to a full-time job.
“Think of your system as a dimmer switch instead of an on/off switch,” says Krueger. “Maybe you’re doing something simple, flexible and potentially attractive – but that only works if it’s a decision.”
As retirement approaches, the focus shifts from building wealth to protecting it, ensuring that the plan can hold up if retirement comes earlier than expected or if markets underperform in the early years of retirement.
Strengthening your financial footing is also very important. That can include reducing debt, managing withdrawals carefully and making sure the portfolio can withstand volatility.
“None of this is fun, but it’s what gives you financial stability,” Krueger said.
For young workers, the advantage is time — and the ability to build flexibility long before retirement becomes a reality.
“Planning to choose instead of ‘working forever’ means you’re not tied to one job or one type of job,” Krueger says. “You build flexibility into your future.”
