Think tank proposes capping Social Security benefits at $100,000
A Washington think tank has proposed capping annual Social Security benefits for married couples at $100,000 as a way to reduce a looming deficit in retirement trust funds.
Most Americans want to continue working after retirement. However, very few retirees actually work.
The findings from a new study show a persistent gap between expectations and reality for American retirees.
According to the Employee Benefit Research Institute’s 2026 Retirement Confidence Survey, about three-quarters of American workers plan to continue working for paychecks after retirement. But only 31% of retirees are actually working, the study found.
In previous EBRI studies dating back to 1999, the results were surprisingly consistent. Each year, 70% to 80% of workers say they expect to continue working and receiving a paycheck after retirement. However, the proportion of retired people working has never exceeded 34%.
Experts say the false hope of being able to work after retirement speaks to a fundamental misunderstanding of both retirement and the labor market.
Most of us don’t retire on our own terms.
Many American workers imagine moving toward retirement at their own pace, whether by cutting back on hours, working part-time or remotely, or continuing to work as a consultant for the company that once employed them full-time.
Other workers imagine that they will continue to work full-time after retirement, receive a paycheck into their 70s, and continue working until their paycheck drops.
However, in reality, most workers are unable to resign on their own terms. Retirement often comes suddenly and unexpectedly, as a result of poor health or company downsizing.
And once you quit your job, it’s not easy to return to work.
“People are expecting a gradual transition by reducing work hours, but eventually it will stop completely,” said Craig Copeland, director of wealth benefits research at the research and education nonprofit EBRI.
In many cases, “you’re going to have to find a completely new job” to continue working after retirement, Copeland said. “And it’s hard to find a completely new job as you get older.”
If the job is part of your retirement plan
Working after retirement sounds contradictory. In theory, you’re either working or retired, not both.
The persistent desire to work after retirement, as expressed in EBRI research and elsewhere, appears to reflect a widespread desire among American workers that they can finance their retirement by continuing to work.
Many American workers are concerned that they are not saving enough. According to EBRI, around two-fifths of workers are not confident in their financial security in retirement. Retirement confidence has been on the decline in recent years, with rising inflation and plenty of economic uncertainty.
The EBRI survey is based on responses from 2,544 Americans in January.
The EBRI report found that 75% of workers said they expected to use their jobs as a source of income in retirement. The study ranks paid work fourth among all sources of expected income in retirement, behind Social Security, the workplace, and personal retirement savings.
“That’s one of the ways they’re planning for retirement: continue to work and earn an income,” Copeland said.
However, only 27% of current retirees report receiving income from paid work.
Working after retirement is harder than you think
One barrier to working after retirement is the relative scarcity of part-time jobs. Relaxing your schedule from full-time to part-time in your field isn’t as easy as you might think, Copeland said.
Another problem is that older Americans have difficulty finding new jobs.
“If you’re an older job seeker, it can be very difficult to re-enter the workforce,” says Maura Porcelli, senior director of workforce at the National Council on Aging.
Other retirement surveys show how much Americans rely on paid employment to fund their retirement.
A recent report from the Transamerica Retirement Research Center found that 48% of pre-retirement Americans say they plan to work in retirement, 32% say they don’t, and the remaining 19% say they’re not sure.
“Many workers plan to continue working after retirement for economic and health aging-related reasons,” said Katherine Collinson, CEO of Transamerica Center. “But the experiences of retirees show that life can happen, such as health problems, family responsibilities, or unemployment that suddenly forces you out of your job.”
Mr Collinson said some of the conflicting data could reflect society’s differing attitudes towards retirement. Example: If an employee takes advantage of a retirement plan, lives in retirement for a year or two, and then takes a full-time job in a related field, is he or she still retired?
“Semantically speaking, when people self-identify as ‘retired,’ are they endorsing the social expectation that they are no longer working?” she said.
Here’s why America’s retirees are returning to work
American retirees continue to work for a variety of reasons. To stay active and engaged, to postpone receiving Social Security benefits or drawing down on retirement savings, to make ends meet.
Recent evidence suggests that more retirees are working out of necessity. According to AARP’s February report, 7% of U.S. retirees have recently “de-retired” and re-entered the workforce. The most common reason was to make more money.
“I think we’re in a zeitgeist of economic uncertainty right now,” said Carly Roszkowski, vice president of AARP’s Financial Resilience Program. “People are worried about living beyond their retirement savings. They’re worried about the price of gas and groceries.”
In a perfect world, Roshkowski said, retirees would work because they want to work, not because they have to.
“Many people feel they still have a lot left to give,” she says. “They want to be challenged, they want to feel a purpose and they want to give back.”
