With longer life expectancy and fewer defined-benefit pension plans, traditional retirement is becoming less attainable. Surveys and data suggest that fears of financial insecurity are leading many retirees to “unretire”, reshaping expectations around ageing and work.
Economic Instability Reshaping Retirement Expectations
In 2026, retirement for many older Americans may no longer be a permanent exit from the workforce. According to US Bank’s 2025 Wealth Report, nearly two-thirds of Americans fear they might have to return to work after retiring. This concern is rooted not in poor financial choices, but in external economic conditions that have made it more difficult to meet long-term financial goals, even with careful budgeting and investing.
The same report found that only 48% of Americans contribute to their retirement savings, and just 37% are actively preparing for retirement. These figures underline the gap between aspiration and reality for many workers approaching retirement age. For Generation X, the situation is particularly stark, with nearly a quarter reportedly abandoning the goal of retiring altogether.
Increased longevity adds another layer of complexity. Many Americans now anticipate retirement periods lasting 20 to 30 years. Yet, as shown in a ResumeBuilder.com survey of 3,574 people aged 65 and over, financial resources often fall short. Over a third of respondents still working have no plans to retire before the next decade, and nearly one in eight plan to rejoin the workforce in 2026 or have already done so.
According to AARP Research, 6% of retirees have returned to work within the past six months, largely due to a deteriorating economic outlook. Inflation remains a significant factor, with housing and healthcare costs rising faster than the general inflation rate, which stood at 2.7% for the 12 months ending in November.
Retirement Becomes Flexible, but Challenges Persist
The return to work among retirees is not always negative. According to ResumeBuilder.com, many older Americans said they welcomed the opportunity to remain active, engaged and purposeful. However, many also expressed concerns about job market barriers, including age discrimination and a lack of flexible roles suited to older workers.
While nearly 20% of people aged 65 and older were working at least part-time in 2024, according to US Census Bureau data, the unretirement rate has actually declined, from 3.2% in 2018 to 1.9% by mid-2024. This suggests that re-entering the job market is not straightforward, despite growing interest or need. Those who do manage to return often rely on part-time or gig work, as these roles tend to be more accessible.
Senator Kirsten Gillibrand, speaking to Business Insider, noted that nearly half of US workers lack access to employer-sponsored retirement plans, and over half have no dedicated retirement savings. “Because of the rise in costs, people’s fixed incomes, their Social Security benefits, aren’t enough to cover all their expenses,” she said.
This financial strain is affecting not only current retirees but younger generations as well. According to US Bank, 86% of both Gen Z and millennials report that today’s economic climate is affecting their retirement timeline. Their average savings remain far below the £1 million threshold Americans believe is necessary for a comfortable retirement.
Despite the challenges, many older Americans say they are not ashamed to return to work. Some cite a desire to maintain mental sharpness or enjoy social connections. Others, though, express frustration at needing to work more hours than they would prefer or being unable to switch to less physically demanding roles.
