More Americans Are Working Beyond 65. Here’s What It Means for Your Retirement Plans

The percentage of Americans 65 and older in the workforce nearly doubled from 11% in 1987 to 19% in 2023, when over 11 million Americans in that age group were working or actively seeking work. And workers age 75 and older are the fastest-growing age group in the workforce, according to Pew Research Center.

For some, working longer represents opportunity and personal choice. To be sure, improved health and activity among older Americans and rising education levels have contributed to this trend. Over half (53%) of working adults 65 or older had college degrees in 2019 — a significant increase from 25% in 1985.

For others, however, the trend reflects mounting economic pressures and diminished retirement security.  Some people work out of financial necessity due to inadequate retirement savings, declining pension coverage, and the shift to less secure 401(k) plans.

We’ll explain this trend below and share advice for people who want to be better prepared for retirement.

An Aging Workforce

The growth in the 65-and-older workforce since the 1980s stems partly from demographic shifts, as the populous Baby Boomer generation reached retirement age. But it also reflects their changing attitudes toward work and retirement, along with changes in the financial health of many older Americans.

Mandatory retirement due to age is illegal in the U.S. in most cases, though many older workers still report being pushed out of jobs before they would have retired willingly. Improved health care and longer life expectancy also make extending careers more viable, while technology has reduced physical demands in many occupations.

But even as we celebrate staying active while aging, there are fewer financial safety nets that once supported dignified retirement. The narrative of “working by choice” can mask a systemic failure to provide security for aging Americans. Changes to Social Security that raised the full retirement age from 65 to 67 have caused many older adults to delay retirement to increase benefit amounts. So has the shift from defined-benefit pensions to 401(k)s, which transferred retirement risk to individuals, leaving many with insufficient savings.

Preparing for Retirement

A curious thing happened after the outbreak of the COVID-19 pandemic: Starting in March 2020, the percentage of people who expected to work full-time beyond the age of 62 dropped significantly, particularly among women and lower-income workers. In the six years prior to the pandemic, on average, 54.6% said they expected to work beyond 62. Meanwhile, from 2020 to 2024, 49.4%, on average, said the same, including a low of 45.8% in 2024. There were similar declines in expectations of working past 67.

That suggests that older adults who continue to work might do so not because they want to, but out of absolute necessity.

Whether you expect to stop working by age 62 or want to continue working into your 60s and beyond, here are some tips that can help you prepare for retirement when the time comes:

Early Career

• Maximize retirement contributions as early as possible, taking full advantage of employer matches.
• Save and invest as much as you can outside of traditional retirement accounts.
• Expect multi-generational teams at work and potentially delayed promotions due to older workers remaining in the workforce.

Mid-Career

• Conduct a retirement readiness assessment with a financial advisor to identify shortfalls while there’s still time to adjust.
• Prioritize health insurance continuity and consider disability income insurance, as medical costs can quickly erode savings.
• Consider housing decisions carefully, potentially downsizing earlier to reduce costs and build savings.
• Consider career pivots that might enable more longevity.

Approaching traditional retirement age:

The Bottom Line

While some older adults enjoy being active members of the workforce, others find themselves unable to retire due to their lack of savings. Maximizing retirement contributions as early as possible and investing as much as possible outside of traditional retirement accounts can boost retirement readiness. It can also help to check in with a financial advisor periodically to assess your financial situation and get advice on better retirement planning. As you get closer to retirement age, consider catch-up contributions to retirement accounts.