Say Goodbye To Retirement—Why It’s More Difficult To Retire And What To Do About It

The traditional vision of retirement—a carefree chapter filled with leisure, travel, and financial security—is becoming less realistic for many Americans.

According to Northwestern Mutual’s Planning & Progress study, more than half (52%) of Gen Xers who are approaching retirement age doubt their preparedness, with the average savings totaling only about three times their annual income.However, according to Fidelity, people who are ages 50 and 55, should aim to have six and seven times their salary saved, respectively.

The gap between the classic retirement goal and today’s financial realities continues to grow for many people, requiring some to adjust expectations and redefine what retirement is altogether.

Due To Changing Economic Conditions, Retirement Has Become More Difficult To Achieve

The older model of retirement was largely built on a more solid and reliable foundation, but younger generations may find it harder to retire as they face new headwinds.

In the past, Americans were retiring with pensions, had a lower cost of living, and could rely on a Social Security system that was more financially solvent.

Defined pension plans have largely disappeared, replaced by workplace retirement plans like 401(k)s, where the burden of saving has shifted entirely to the individual. While company matches on contributions provide a helpful boost to retirement savings, they are often not enough on their own to close the gap.

While many Americans may attempt to prioritize saving and investing for retirement, a significant portion still rely heavily on Social Security as a primary source of income in their later years. As of Dec. 31, 2024, nearly 90% of individuals ages 65 and older were receiving Social Security benefits, which made up approximately 31% of their total income on average.

However, there are concerns that Social Security will run out by the time younger generations retire. According to the 2025 Trustees Report, the program’s reserve funds are expected to be depleted around 2034, but they won’t completely disappear. At that point, ongoing tax revenue would only be enough to cover about 81% of scheduled benefits.

This means future retirees are more likely to face reduced benefits rather than a total loss of them, but they could still end up with less than expected.

Rebranding Retirement To Work For You

We are now in a position where what was once true about retirement has drastically shifted, making a rebrand necessary.

Instead of aiming for a complete and permanent stop to work, a more realistic and flexible goal might be semi-retirement—a phase of life where people can choose to scale back or change how they work, rather than stop altogether.

Northwestern Mutual’s data showed that 40% of Americans expect to continue working during retirement.

Being work optional acknowledges both financial necessity and personal choice. Some may want to continue working for social connection, while others may need it to supplement insufficient savings.

However, it’s important to be realistic and practical about how long you plan to work, as many people retire earlier than expected.

Roughly half of men and less than half of women retire at age 65 or earlier, according to Geoffrey Sanzenbacher, Professor of the Practice at Boston College.

Ultimately, deciding what retirement looks like for you is one of the most important steps in planning for the future. If your goalaligns with the traditional vision, that’s perfectly valid. But the good news is there’s no one-size-fits-all model anymore.

Embracing the freedom to define retirement on your own terms—whether that means part-time work, pursuing a passion project, or scaling back gradually—can ease the pressure and make your goals more attainable. It’s not about following old rules, but creating a version of retirement that works for your life.

The Bottom Line

Retirement, as we’ve known it, may be due for a rebrand. Economic realities are shifting, and the idea of a full retirement is no longer practical for many. Embracing flexibility and redefining retirement allows you to move toward a future that balances financial security with personal fulfillment, even if that means working during retirement years.