No longer is 65 considered retirement age for many Americans. Seniors are delaying retirement age out of financial necessity: inadequate savings, health care costs, and more.
More Americans turned 65 in 2025 than ever before, with an average of 11,400 reaching retirement age every single day, a trend that’s expected to continue through 2027. Even though countless boomers are reaching the age when people traditionally enjoy the fruits of their labor – and leave the labor behind – more and more of them are choosing to remain in the workforce for years past that traditional retirement milestone.
A 2025 survey found that one in three adults in the U.S. reported that they’re currently employed past retirement age – or they plan to be. Employees age 67 and over aren’t just working part-time – they’re working an average of 30.6 hours, according to a national analysis. And many of these retirements aren’t postponed only for a few years. The same analysis found that 14% of those in their 70s, three-plus years past 67 or when they can claim full Social Security benefits, continue to draw a paycheck.
Primary reasons for delaying retirement
Why are seniors working longer these days? Many older adults enjoy the structure, sense of purpose, or socialization of going to a workplace every day and continue to work or return to work after a period of retirement for those benefits. However, the 2025 survey above found money to be the main reason many seniors are keeping their jobs. Financial concerns break down into three primary categories.
Inadequate savings
First, many of these seniors haven’t saved enough. Most financial advisors recommend having 10 times your annual salary (at retirement) saved to exit the workforce at 67. For example, if you’re making $100,000, you should ideally have $1 million socked away before you put in your resignation. If you’re retiring at 65, Fidelity advises having 12 times your salary saved. But in 2022, the Federal Reserve reported that the median savings amassed by 55- to 64-year-olds is just $185,000.
That means that many retirees must rely heavily on their Social Security benefits to survive. While Social Security benefits have an annual cost of living adjustment (COLA), the 2.8% increase in 2026 was insufficient to meet seniors’ needs.
“Seniors on fixed incomes are rightly concerned that the Social Security COLA is not keeping pace with the true impact of inflation on their living costs, especially in areas where prices are soaring. Medical, housing, and grocery costs are outstripping the COLA,” said Max Richtman, CEO of the advocacy group National Committee to Preserve Social Security and Medicare.
Moreover, if seniors are on Medicare, that COLA could be almost wiped out by the increase in their Medicare premiums and deductibles alone, according to the National Council on Aging.
Worry over healthcare costs
Many seniors may be delaying retirement due to concerns about health care costs. In fact, 72% of Americans say that one of their greatest fears is that they won’t be able to afford their health care costs in retirement, according to the annual Nationwide Retirement Institute Health Care Cost in Retirement survey in 2023.
And that fear isn’t unfounded. Seniors on Medicare spend 13.6% of their income on health-related expenses, twice what younger generations spend, according to KFF, an independent health policy organization. Fidelity reports that a 65-year-old who retired in 2025 should expect to spend an average of $172,500 in health care expenses over the course of their retirement.
Another reason for older adults delaying retirement by hanging on to a job – and their employer’s health insurance – is if their spouse is covered by that plan and the spouse isn’t yet eligible for Medicare. This option may be more cost-effective than COBRA (a continuation of employer health insurance after leaving a job) or purchasing insurance through the Affordable Care Act (ACA) Marketplace for their spouse.
Loss of subsidies
The expiration of enhanced ACA subsidies at the end of 2025 is another subject of concern for those who are considering early retirement (before they’re eligible for Medicare) or who have already retired. Middle-income Americans aged 50 to 64 are seeing their rates double or triple due to the loss of these subsidies, combined with an estimated 18% increase in premiums in 2026. These unexpected rate hikes could make early retirement out of the question.
Jamie Cox, managing partner at Harris Financial Group, told of a client, a wealthy ex-Fortune 500 executive, who was considering early retirement but decided to stick it out for the affordable health insurance coverage. These soaring insurance costs could also cause those who have already retired early to have to return to work.
To escape skyrocketing insurance and health care costs, some early retirees have even left the country … or are considering it. “In the United States, healthcare has become the single greatest threat to retirement security,” says Jennifer Stevens, executive editor of International Living. “Premiums and deductibles now swallow entire Social Security checks, while millions of Americans delay treatment or medication because they simply can’t afford care. People want good doctors, modern hospitals, and costs they can plan for. In many countries, that’s exactly what they find.”
The downsides of unretirement
If you decide to postpone retirement or return to work, be aware of these pitfalls that could end up costing you, if you have already begun claiming Social Security and benefits.
Your Social Security benefits may be cut. Until you reach your full retirement age, having income beyond a certain limit could cause you to take a hit on your Social Security benefits. Once you reach your full retirement age, your benefits will return to normal. See Kiplinger.com for specifics.
Your Medicare premiums may increase. If your modified adjusted gross income (MAGI), including earnings from your job as well as pensions, dividend-paying investments, capital gains, and required minimum distributions, exceeds a certain threshold you’ll incur a surcharge on your Medicare premiums, called an Income-Related Monthly Adjustment Amount (IRMAA).
You may pay more in taxes. Earning more money could, of course, put you in a higher tax bracket for your income and some portion of your Social Security earnings. However, if you are at least 65 by the end of the tax year (from 2025 through 2028) you’ll benefit from an additional deduction up to $6,000, which is based on your income and capped at $175,000 for single filers and $250,000 for joint filers. Find more details at IRS.com.
Americans delaying retirement for financial reasons may feel stuck, deprived of privileges that their parents and some peers have enjoyed. Unless the nation’s systems are improved for all, working well into old age may become the norm.
