Why American retirees are returning to work
A new study from the Employee Benefit Research Institute shows the rate of return to work among retirees in the United States.
Conventional wisdom about retirement planning says that to retire with peace of mind, you should aim to save 10 times your annual income, or the “magic number” well above $1 million.
But research on actual retirees shows that these savings goals may be too high, at least for most of us.
The typical retiree has just $126,000 in household savings, according to the 2025 Retirement Study by Transamerica Retirement Research Center. Other research suggests that only about half of retirees have any savings for retirement.
And importantly, most retirees say they’re doing pretty well.
In an April Gallup poll, 82% of retirees said they had enough money to live comfortably.
In the 2025 Federal Survey on Household Economics and Decision Making, 83% of Americans age 60 and older said they were “comfortable” or “doing just fine” financially.
Additionally, a Transamerica survey found that 76% of retirees said they were confident they would be able to maintain a comfortable lifestyle in retirement.
“If you’re asking, ‘Are we adequately prepared for retirement?’ all of these numbers show that we are,” said Andrew Biggs, a senior fellow at the libertarian group American Enterprise Institute.
Do you really need $1 million to retire comfortably?
A few years ago, Mr. Biggs made headlines for a Wall Street Journal column with the provocative headline, “You Don’t Have to Be a Millionaire to Retire.”
What he means is that you can retire with less than $1 million. Most Americans do. And, as research repeatedly suggests, most of them seem to be doing well.
The financial security of American retirees is a topic of endless debate.
Biggs said voices in the retirement industry and news media are exaggerating the concept of a retirement “crisis” and exaggerating the need for households to save seven figures for a comfortable retirement. He’s not the only one who thinks so.
“I agree that not everyone needs $1 million,” said Anki Chen, associate director of savings and finances at Boston University’s Center for Retirement Research. “That’s a very high number for some people, but it’s not high enough for others. This one number doesn’t apply to everyone.”
Most Americans retire with less than $1 million in retirement benefits
Regardless of the benefits of a $1 million retirement account, most Americans retire with much less than that.
How well they do is a more nuanced question.
In the 2026 EBRI/Greenwald Retirement Confidence Survey, nearly three-quarters of retirees rated their financial well-being as good, very good, or excellent. Additionally, 73% said they were confident they would have enough money for retirement.
“Most retirees seem to be getting by,” said Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute. “However, it becomes difficult to define how to make ends meet.”
When it comes to saving, retirees lack confidence.
In a Transamerica survey, only 56% of retirees said they believed they had built an adequate retirement nest egg.
And this finding makes sense given that only about half of America’s oldest adults have a retirement account.
“They’re doing well financially,” Transamerica Center CEO Katherine Collinson said. “However, if you suffer a major shock, such as having to pay large out-of-pocket long-term medical expenses, your savings can be wiped out quickly.”
Transamerica’s report found that nearly 50% of retirees say they would rely on family or friends for long-term care rather than paying a professional caregiver.
The Center for Retirement Research maintains the National Retirement Risk Index, which estimates the number of workers at risk of not maintaining their standard of living after retirement.
In recent years, the risk index has ranged from approximately 40% to 50%. Currently, that rate is 39%, meaning that around two in five workers are likely to do less well in retirement.
For retirees, financial security can be fragile.
Collectively, research on retirement suggests that while most retirees are making ends meet, their financial security may be fragile.
Of course, the same is true for millions of young Americans. According to a recent study by Bankrate, only 47% of Americans have enough cash on hand to cover $1,000 in case of an emergency.
AEI’s Biggs said retirees are more financially stable than younger Americans, as evidenced by survey responses.
For example, in the Household Economics and Decision-Making Survey, the proportion of Americans who say they are worse off financially decreases with age, from about 32% of those aged 35 to 44 to 12% of those aged 75 and older.
“Only a small percentage of older adults say they have a truly difficult life, and that percentage is smaller than those who are working,” Biggs said.
How much money do you really need to retire comfortably?
If most of us didn’t need $1 million in the bank to retire comfortably, how much would we need?
According to Biggs and other experts, the answer depends on many factors, starting with how much you earned while working.
The median household income in the United States is about $84,000, according to federal data. Even if you put 10 times that amount in the bank, you still wouldn’t have $1 million.
Retirement experts say that low-income households may not need as much income to maintain their standard of living, and that “the magic number of seven figures for retirement is more appropriate for high-income earners.”
Most Americans rely primarily on Social Security for their retirement income. These benefits are progressive. The lower your income, the more income you’ll get back in your Social Security check. And that percentage affects how much you need to save to make up the benefits.
Social Security “replaces” 90% of your income up to $1,286 per month. The replacement rate drops to 32% for incomes between $1,286 and $7,749, and to 15% for incomes above $7,749.
In other words, low-income households “shouldn’t be saving as much for retirement,” Biggs said. “And they’re not saving as much for retirement.”
