Expert Cautions That Working Longer May Not Secure Retirement
For years, experts advised that staying in the workforce longer could help people build a stronger financial base for retirement. Some research, such as a 2018 study, even suggested that delaying retirement by as little as six months could improve financial security more than increasing savings rates by large amounts. However, economist Teresa Ghilarducci, a professor at the New School and author of Work, Retire, Repeat, challenges this view.
In a recent episode of the Decoding Retirement podcast, Ghilarducci described this advice as a “convenient untruth.” She explained that society has shifted the entire responsibility for retirement security onto individuals, assuming everyone can simply extend their working years to cover any shortfall in savings. This belief rests on the ideas that people are living longer and that jobs are becoming easier—ideas she says do not hold true for most.
Ghilarducci emphasized that while some Americans have seen longevity improvements, these gains mainly benefit people with stable lives, high-paying jobs, and good healthcare access. For example, white men have experienced the largest increases in life expectancy, partly because their work and life conditions support longer, healthier lives.
Conversely, many others have not seen similar changes. White women, she noted, have generally seen little improvement, in part because they continue working more. According to Ghilarducci, working longer does not always benefit health, especially if the jobs involve stress or little control. Only about 11% of workers have the autonomy that might make extended working years beneficial for their health and wellbeing.
The remaining 89% face jobs that may increase stress and anxiety, factors linked to higher cortisol levels, which can be harmful as people age. Women over 60 working in service-related roles may experience increased illness and shorter lifespans due to work-related stress, Ghilarducci said.
This situation presents a hard truth: although working longer might increase retirement income on paper, many people cannot realistically continue working due to health or job conditions, even if their savings fall short.
For individuals in their 50s or 60s, Ghilarducci advises conducting a financial reality check. This includes estimating expected retirement income and reducing that estimate by 20% to be cautious. Then, estimate expected expenses and add 20% as a buffer. If this assessment shows a gap, she suggests exploring options such as working longer if possible, cutting expenses, and consulting a fee-only financial adviser.
Using tools like AARP’s retirement calculator can assist individuals in understanding their financial situation better. Ghilarducci also reminds people to consider the roles of programs like Social Security and Medicare in their retirement planning.
The core message is clear: simply planning to work longer may not be enough to secure a comfortable retirement, especially for those without the privilege of stable, low-stress jobs or consistent health advantages. Individuals need to assess their situations carefully and seek professional help when needed.
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