More Americans are banking on extended working years to bridge retirement savings shortfalls. Fresh data indicates that approach may be more fragile than it appears.
Retirement confidence has declined, with just 61% of workers reporting they feel prepared for comfortable later years, per the latest Employee Benefit Research Institute survey. That’s down from 67% a year earlier—the lowest level in nearly ten years.
To bridge the gap, many workers plan to delay retirement or continue working. The problem: that strategy doesn’t always hold. Nearly half of workers who retired in 2025—46%—left the workforce earlier than planned, highlighting how unpredictable career endings can be.
Rising costs, mounting debt and uncertainty around Social Security and Medicare are adding pressure. Many employees have a plan to work longer but no clear backup if they can’t.
Why working longer isn’t really a plan
The gap between expectation and reality is something financial experts say workers often underestimate.
“The biggest problem is that people treat working longer like it’s a plan when it’s really just an assumption,” says Pam Krueger, founder and CEO of Wealthramp. “And it’s an assumption that depends on a lot of things going right.”
For many workers, career endings aren’t fully within their control. Health setbacks, layoffs or caregiving duties can abruptly alter even the best-laid plans—and in 2025, factors like these drove the vast majority of early retirements, per EBRI.
That risk shows up in the labor market, too. Data from the U.S. Bureau of Labor Statistics shows older workers who lose jobs are significantly less likely to find new positions, with reemployment rates falling sharply after age 55.
“The real risk isn’t just that you stop working early. It’s that you built your entire plan around something you can’t fully control,” Krueger notes. “Really ask: Is this what I really want to aim for as my Plan A?”
Working longer isn’t a retirement strategy—it’s a gamble. And it calls for a real Plan B.
What a realistic backup plan looks like
A true backup plan isn’t about picking a single alternative but building flexibility into how retirement actually works.
“A good Plan B isn’t one big solution. It’s in the layers,” Krueger says. That starts with understanding actual spending needs, not estimates, and identifying where budgets could realistically be adjusted if retirement comes earlier than expected.
From there, it’s about building multiple income sources—including Social Security, investment withdrawals and, for some, the option of part-time work.
Some preparation also involves stress-testing assumptions: What happens if retirement arrives early, or if markets underperform in the early years? That kind of scenario planning can reveal gaps before they become real problems.
Building that kind of flexibility takes preparation, not just hoping things work out.
“That’s really the goal: optionality,” Krueger says. “You don’t want to be in a position where you’re forced to keep working. You want to be able to choose it.”
She often encourages workers to think less in terms of a hard stop and more in terms of a gradual transition out of full-time work.
“Think of your plan as a dimmer switch instead of an on/off switch,” Krueger observes. “Maybe you ease into something lighter, more flexible and potentially interesting—but that only works if it’s a choice.”
As retirement approaches, focus shifts from building wealth to protecting it—ensuring a plan can hold up if retirement comes earlier than expected or if markets underperform in the early years.
Strengthening your financial footing also becomes more critical. That can include reducing debt, managing withdrawals carefully and ensuring a portfolio can withstand volatility.
“None of this is exciting, but it gives you financial stability,” Krueger says.
For younger workers, the advantage is time—and the ability to build flexibility long before retirement becomes reality.
“Planning for optionality instead of ‘working forever’ means you’re not dependent on one job or even one type of job,” Krueger adds. “You’re building flexibility into your future.”