Retirees are returning to work in droves, crushed by the state of today's economy — safeguard your safety net now

Many workers planning for retirement may see trouble brewing and are hedging their bets. Data from F&G Annuities & Life, Inc.’s latest Retirement Reconsidered survey showed 51% of U.S. pre-retirees are aiming to semi-retire rather than stop working entirely. Meanwhile, 75% of the same cohort are considering or delaying their retirement date. That’s up from 70% a year ago.

Why the rush back to the rat race?

U.S. retirees are heading back to a paycheck for multiple reasons, but financial unpreparedness comes first.

“Retirement isn’t a finish line you cross once,” Bradly Stevens, Vice President and Wealth Advisor at San Diego-based BAS Financial, told Moneywise. “It’s a number that has to keep working for 25 or 30 years, and the people heading back to work are usually the ones who found that out the hard way.”

When Stevens tracks how under-prepared the typical worker is, he says the preparedness gap is wider than most people assume.

“The average 401(k) balance nationally is $167,970, according to Vanguard’s 2026 How America Saves report,” he noted. “And that’s an average, so it’s pulled up by high savers, and the typical worker has far less. A balance like that doesn’t generate enough income to replace a paycheck, which is a big part of why so many people un-retire.” Stevens said he saw the same pattern up close when he recently analyzed 687 San Diego County employer retirement plans, drawn from Department of Labor Form 5500 filings for 2024 and covering about 857,000 workers.

“The average participant balance, locally, was about $68,000,” he said.

What surprises people in financial services is that going back to work isn’t only an under-saver’s problem. High earners land there too, usually for a different reason.

“They never adjusted their spending for a world without a paycheck, or they underestimated taxes on retirement withdrawals, or they retired into a down market and watched sequence-of-returns risk do real damage in the first few years,” Stevens said.

How to build a retirement safety net

For retirees who want to stay retired and financially sound, build a strong financial foundation with these wealth advisor-approved building blocks.

Keep cash available for the unexpected

If there’s one thing any retiree can expect, it’s the unexpected. That’s one reason it’s a good idea to have different buckets of money for different needs.

“Aim to have enough in cash on hand, perhaps in a money market account, to cover near-term expenses and emergencies, so you aren’t forced to sell investments during a market downturn,” Mary Ware, Senior Wealth Advisor and Managing Partner at Carnegie Private Wealth, told Moneywise. “How much you need depends on your expenses, sources of income and comfort level, but I generally like retirees to have at least 12 months of anticipated withdrawals available for whatever curveballs come their way.”

Stress-test your retirement plan

Before you retire, spend a year living and spending as you expect to in retirement, which Ware calls “auditioning your retirement.” But don’t just do it before you retire; do it again during retirement.

“Once you are retired, don’t assume that because your retirement plan worked before that it will always work,” she noted. “Review it at least annually and whenever something significant changes in your life.”

Retirees should keep stress-testing and do so regularly, and for good reason.

“What happens if inflation stays higher for longer, the market takes a prolonged downturn or your health care and caregiving expenses exceed expectations?” Ware asked. “What if you live to 95 or 100?”

Be willing to adjust your spending

One warning sign of a retiree cash dip is consistently spending more than your plan allows.

“That’s especially the case if you’re withdrawing more from your investments than anticipated to cover everyday expenses,” Ware said. “Another is dipping into money set aside for later years to pay today’s bills.”

Also, if your numbers are changing, adjust sooner rather than later.

“That might mean reducing expenses, reconsidering a major purchase or finding ways to earn some income,” Ware said. “Even part-time or contract work can help extend the life of your nest egg. And working a little longer before retiring may give you more options than having to return to work later because you’ve run out of money.”

Run the numbers on Social Security, too

To avoid being pushed back into the workplace, money management experts say your best move is a number.