Understanding the Trend of Delaying Retirement
As more adults approach retirement, many are reconsidering their plans to step away from the workforce. A recent study reveals that nearly a quarter of those nearing retirement are thinking about working longer, while over half of early retirees between the ages of 45 and 60 are considering returning to work. This shift is driven by a mix of emotional and financial factors, with many individuals seeking mental stimulation, purpose, and additional savings in an uncertain economic climate.
Who Is Delaying Retirement?
According to a 2025 survey conducted by F&G Annuities & Life, Inc., nearly a quarter of adults approaching retirement are considering delaying their retirement. Additionally, almost a third of already retired individuals are contemplating “unretiring” or returning to work. Among Generation X members who retired early, as many as 54% are thinking about going back to work. This trend is not limited to older generations; surveys show that even younger people are rethinking their expectations for early retirement.
The gap between the age people want to retire and the age they expect to retire is significant. For example, Gen Z wants to retire at 61 on average, but expects to do so at 69. Millennials aim to retire at 63 but anticipate retiring at 71. These discrepancies highlight the growing uncertainty surrounding retirement planning.
Reasons for Delaying Retirement
For some, the decision to delay retirement stems from a desire for continued engagement and personal fulfillment. One-third of survey respondents cited concerns about a lack of purpose, while 42% mentioned enjoying the challenge and mental stimulation of work. However, the primary reason for delaying retirement is financial. Over half of those considering a return to work are worried about their savings and the need for greater financial flexibility in a volatile economy.
Pros and Cons of Delaying Retirement
Deciding to work longer comes with both advantages and challenges. On the positive side, delayed retirement can lead to larger Social Security benefits, more time to save, catch-up contributions, and increased financial adaptability.
- Delayed Social Security Benefits: Working longer means receiving higher Social Security payments when you eventually retire. The Social Security Administration adds 8% to your benefit for every year you delay beyond your full retirement age.
- More Time to Save: Continuing to work provides more opportunities to contribute to tax-advantaged accounts like 401(k)s and IRAs. In 2025, contribution limits are $23,500 for 401(k)s and $7,000 for IRAs.
- Catch-Up Contributions: Those aged 50 and older can take advantage of catch-up contributions, which allow for extra savings. For 2025, this includes an additional $7,500 for 401(k)s and $1,000 for IRAs.
- Financial Adaptability: Staying employed offers greater flexibility to handle unexpected expenses or emergencies.
On the other hand, there are several potential downsides to consider:
- Physical and Mental Challenges: As people age, they may face health issues that make full-time work difficult, especially in physically demanding jobs.
- Difficulty Finding Work: Age discrimination remains a concern, with studies showing that many workers over 50 experience bias in the job market.
- Family Needs: Caring for grandchildren or other family responsibilities may conflict with returning to work.
- Delayed Personal Plans: Many retirees hope to travel or pursue hobbies during their early retirement years, which could be affected if they continue working.
Should You Delay Your Retirement?
Whether or not to delay retirement depends on individual circumstances, including financial stability, health, and personal interests. With life expectancy increasing—rising from 69.7 to 79.7 years between 1960 and 2017—it’s possible that many will need to work longer than previous generations.
However, the choice doesn’t have to be all or nothing. Part-time work, freelancing, or starting a side hustle can offer a balance between staying engaged and maintaining financial flexibility. Retirees might find fulfilling roles such as volunteering, tutoring, or consulting in their former fields.
Final Thoughts
Many individuals over 50 are choosing to delay retirement due to financial needs, but this decision comes with its own set of considerations. While extended employment can provide more savings and flexibility, it also presents challenges related to health, job opportunities, and personal goals. For those unsure about their retirement plans, consulting with a financial advisor can help create a tailored strategy that aligns with both emotional and financial needs.
