December 6, 2023

Americans’ expectations of when to retire vary widely from the 30s until old age. Now, one in five has another answer: never.

Twenty percent of American adults think they will never retire according to a new study Launched by news site Axios and market research firm Ipsos. Of those respondents, 70 percent said it was because they didn’t think they could afford to stop working.

“The fact that one in five Americans don’t feel like they’ll ever retire is a pretty grim number,” said Sarah Feldman, a senior data reporter at Ipsos. “I think it really highlights just how bad a lot of Americans are financially and in retirement.”

The study surveyed 1,238 Americans aged 18 or older in what Ipsos calls a “nationally representative” sample. When asked when they would consider leaving the workforce, “I don’t think I’ll ever retire” was the third most common response, behind being 65 or older (33%) and “I’m already retired” (26%).

For some financial advisors, the result is no surprise.Ron Strobel, Founder retire wisely An employee in Meridian, Idaho, said many of his clients and friends thought leaving his job was too big of a leap of faith.

“Retirement is a big unknown, and some people simply don’t want to accept that risk,” Strobel said. “As financial planners, we can help provide clarity, but in the end there is always always a risk that things will go wrong.”

This caution fits with a broader trend: Over the past three decades, Americans have been retiring later and later. From 1991 to 2022, the national average retirement age rose from 57 to 61, According to Gallup polling company.think tank American Enterprise Institute The age of discovery was even higher, rising from 62.6 years in 1990 to 65.6 years in 2019.

In particular, the past few years have been a difficult time to retire. In June 2022, U.S. inflation rose to a 40-year high of 9.1%, according to the Census Bureau Bureau of Labor Statistics (although it has since dropped to 3%), devaluing the savings of many seniors. Meanwhile, last year’s volatile stock market battered many retirement portfolios, with the S&P 500, Nasdaq and Dow Jones all hit hard. Worst year since 2008.

For many Americans, all of this makes retirement feel like it might never be feasible.

“The number one reason … is that they don’t think they can afford it,” Feldman said. “So, it’s the financial issues that really lead to the feeling of not being able to retire.”

One of those financial concerns is Social Security. Among Ipsos respondents who are not yet retired, 62% expect New Deal-era plans to cover less than half of their retirement expenses.

Such concerns may be well-founded.According to the Social Security Board latest reportthe federal old age and survivors insurance trust fund (the portion that benefits retirees) of the plan is Bankruptcy expected in 2034. At that point, Social Security will only be able to pay 77% of its scheduled benefits.

Last-minute action by Congress could still save the program from that fate, but many Americans still don’t feel safe relying on it.

“One of the most pressing issues right now is the uncertain future of Social Security and Medicare funding,” Strobel said. “After witnessing the fiasco of student loan forgiveness, I’m definitely not looking forward to a debate and possible court case over ‘fixing’ Social Security and Medicare when the time comes.”

read more: Many Americans ‘forced’ to retire early, study finds

But for other Americans, there’s another, more positive reason not to retire: They don’t want to. According to Ipsos, 19% of respondents who have never thought about retiring simply prefer to keep working.

Some financial advisors also find this trend familiar.

“I have a lot of clients who never want to retire,” says founder Jeremy Finger. Riverbend Wealth Management Located in Myrtle Beach, South Carolina. “They want to do work they love. For some, that means taking a part-time job at their current job and only doing the parts they love… For others, it might be a completely different type of work, like volunteering, caring for grandchildren or working part-time in a low-stress job.”

Several of his clients fit this pattern, Strobel said. Some work in real estate, which offers them flexible hours and lucrative part-time commissions. Another example, he said, was a family friend who worked for a government contractor that produced night-vision goggles and other equipment for the military.

“He’s reached retirement age, but has zero desire to retire any time soon because he just loves what he does,” Strobel said. “He has a high degree of autonomy in his work, basically working in a giant warehouse full of the latest technology and gadgets… Nowhere else can he find such exciting ways to fill his day.”