Americans expect to work about four years longer than they’d like as rising living costs and health care expenses reshape their retirement plans, according to new research from Economist Enterprise.
Only 1 in 5 workers say they want to stay in the labor force longer because they enjoy their jobs, according to the report, which was published with support from investment firm Nuveen. Nearly half of the respondents cited living costs as the main reason they expect to delay retirement.
The findings are based on a survey of 2,063 full-time U.S. workers at midsize and large companies.
Short-term needs swamp long-term goals
Financial pressures are reshaping retirement timelines, raising the risk that more workers will need to stay employed well into their later years to make ends meet. The study also found that about one-third of workers have taken a loan from their 401(k) or made a hardship withdrawal. A record share of Americans tapped their 401(k) plans last year to cope with financial emergencies, according to investment giant Vanguard.
Those early withdrawals, which can incur penalties, may be one reason many people delay retirement, said Matt Terry, a project manager at Economist Enterprise who worked on the study.
“People are willing to sacrifice their long-term goals for some of their short-term needs, and that’s probably contributing to the cause of delayed retirement,” Terry told CBS News. “People think, ‘OK, I guess I’ll have to push it out a few years, because I really need the financial support right now.'”
Generation Z workers — those born between 1997 and 2012 — are the most pessimistic about their retirement prospects, with people in that group expecting to retire 5.2 years later than they would like. By comparison, Gen X workers (ages 46 to 61) expect to postpone retirement by 3.9 years, according to the Economist Enterprise analysis.
“I was a little surprised by that — how much do they really know in advance?” Terry said of Gen Z workers. “But they at least know enough that they feel very pessimistic about it, so that’s a finding in and of itself — that even people at the beginning of their careers are feeling that pressure starting to creep in.”
Retiring early, and not by choice
Retirement planning often conflicts with harder realities. Prior research has found that, although Americans largely want to step back from work at age 65, many retire far younger — and not by choice.
The median U.S. retirement age is 62, with many retirees leaving the workforce due to issues outside their control, such as health problems or job loss, according to a 2024 Transamerica Center for Retirement Studies analysis.
The financial stakes of staying employed are high, especially because many Americans nearing retirement are not financially prepared. Median savings for 55-year-olds are about $50,000, Economist Enterprise said, citing data from Prudential Financial.
What’s driving the “great stay”
The findings also offer evidence of a trend in the U.S. workforce dubbed the “great stay” — shorthand for the hordes of employees today who are hunkering down in their jobs rather than exploring other employment opportunities. The reasons include slower hiring by U.S. employers and economic uncertainty, which incline many workers to prioritize stability over the benefits of changing jobs.
About six in 10 respondents to the Economist Enterprise survey said they would choose long-term job security over higher pay or better benefits, while almost one-third of workers have stopped job searching in the past five years because of concerns about sacrificing job security.
That’s borne out by the so-called quits rate, or the share of workers voluntarily leaving their jobs. That fell to 1.9% in February, the lowest level in more than five years.
“A lot of people are pausing their job searches,” Terry said. “That points to a trend where people are becoming a little more stagnant in their jobs, or the labor markets are becoming more stable and potentially less mobile.”