Jan 24, 2025
The median retirement age for Americans is currently 62, with 7 in 10 retirees saying they left the workforce earlier than age 65, according to the Employee Benefit Research Institute.
But because that’s not full retirement age for Social Security purposes, and because Medicare eligibility doesn’t begin until age 65, you may be inclined to work longer. There may be other fears also preventing you from putting your feet up.
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The reality is that retiring early can pose its share of challenges, and many Americans are right to be concerned. But your fears may be unfounded, and there are also some serious downsides to retiring too late.
The CDC says that the typical 65-year-old has a life expectancy of 18.9 years. You may think you have plenty of time, but even if you don’t pass away at a younger age than what’s typical, you never know when your health might decline. You don’t want to spend the bulk of your retirement grappling with medical and mobility issues, leaving yourself little to no time to do things like travel or engage in other activities you’ve always wanted to dive into.
“You know the golden years are not that golden. People say you can do all of this after you retire, but you never know what’s going to happen to you,” said one woman to self-improvement YouTuber Sprouht when she was asked to share her biggest regret.
So, if you’ve been delaying your retirement due to one of these fears, consider that you may be making a big mistake. It’s time to fact check your own beliefs about your retirement.
1. Worried about running out of money
Whether you enter retirement with a $200,000 or $5 million nest egg, you may be worried about depleting it in your lifetime. And the longer you work and save, the less likely that is to happen.
A 2024 survey by Allianz Life found that 63% of Americans are more concerned about running out of money than actually dying. But if you manage your assets wisely, you may be surprised at how easy it is to stretch your nest egg.
Gallup has found a persistent retirement reality versus expectations gap in its surveys. It noted that just over half of those who were 45-60 in 2002-2004 projected that they would have enough money to live comfortably when they retired. But 79% of this same cohort of Americans who are retired 20 years later in fact ended up saying they have enough money to live comfortably.
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First, come up with a rundown of your basic expenses so you know how much your essential needs cost each year. Next, identify the top things you want to do with your time.
From there, work with a financial adviser to come up with a safe withdrawal rate to ensure your portfolio can support you for the rest of your life. That rate should hinge on factors that include your life expectancy and investment mix. You also want to consider what your future Social Security benefits will look like if Congress doesn't act to protect it.
You may be inclined to tell yourself that you can push through for one more year to both boost your nest egg and leave your existing savings untouched for longer.
But while working for one extra year may end up being a helpful thing for your retirement finances, it’s easy to fall into the trap of repeatedly working that extra year until you’re suddenly 75 years old and still reporting to a day job. So before you tell yourself you can power through 12 more months on the job, think about whether you really need to.
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It’s one thing if your retirement nest egg is sorely lacking in funds. In that case, working another year could mean not only boosting your savings, but also, claiming Social Security a bit later for a more generous monthly benefit. But if you have a nice amount of money socked away, it may be time to give yourself a break.
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2. I'll be bored
A lot of people push themselves to work longer because they worry they’ll be bored in retirement. And that’s a valid concern.
But in a 2024 MassMutual survey, 67% of retirees said they're happier than when they were working, and only 8% reported feeling less happy. So you may find retirement to be more rewarding than expected.
Consider, too, that life’s numerous daily tasks don’t disappear in retirement. You may find that grocery shopping, cleaning, and cooking take up more time than anticipated. Plus, once you retire, you may have more time and patience for home maintenance and other tasks you were previously in the habit of outsourcing, leaving you with less downtime.
Of course, it’s important to fill your days with rewarding activities in retirement. But even if money is tight, you can volunteer, start a club, or explore free entertainment through your local community center or house of worship. You can also join the gig economy, take on a part-time job that gets you out of the house, or be a consultant in your field of expertise. Since this would bring in extra income, it could also affect your Social Security benefits.
3. Inflation is too high
Inflation has been notably elevated since the pandemic, so it's easy to see why you may be concerned about it negatively impacting your retirement. Nearly 60% of retirees and 78% of pre-retirees are concerned about their savings and investments keeping up with inflation, according to a recent survey by the Society of Actuaries (SOA) Research Institute.
But while it’s natural to be concerned, rising costs don't always mean you need to keep working and adding to your savings. You should know that if your money is invested and your portfolio is set up strategically, you can beat it and maintain your purchasing power. To this end, it once again pays to work with a financial adviser who can help you assemble an age-appropriate asset mix designed to hedge against and outpace inflation.
Also, remember that Social Security benefits are eligible for an automatic cost-of-living adjustment (COLA) each year that's tied to inflation. In 2025, for example, benefits rose 2.5% following a year of moderate inflation. But in 2023, they rose 8.7% following a year when inflation was rampant. And while Social Security’s COLAs don’t always do a perfect job of helping seniors keep up with their costs, they are inflation-protected.
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Maurie Backman has been writing professionally for well over a decade. Since becoming a full-time writer, she's produced thousands of articles on topics ranging from Social Security to investing to real estate.
