Americans Fear Retirement Shortfall
Older Americans fear that they will not have enough money to live out their ideal retirement, according to a new survey.
The survey for investment banking firm D.A. Davidson polled 1,008 U.S. adults 50 years and older between March 20 and 25 and found that 41 percent said they won't be able to support the retirement lifestyle they envisioned.
Recent decades have seen a significant shift in how many Americans retire. A 2023 Pew Research Center report found that around one in five Americans aged 65 and older were still employed, nearly twice as many as 35 years ago. Data from the Bureau of Labor Statistics shows that 10 years ago, in February 2015, some 8.2 million people over 65 were employed in some capacity. This increased by 11.1 million, 35 percent, in February 2025.
Saving for retirement has become more challenging for many reasons. The cost of living, including health care and housing, continues to rise, and wages have not risen consistently at the same pace. Increased life expectancy also means people need more savings. Stable pensions have largely been replaced by less reliable 401(k) plans, putting the burden of saving on individuals. Student loan debt and caregiving duties often force people to delay saving money for later life.
"Once one gets to retirement age and hasn't accumulated enough retirement savings, one only has two options left-continue working or accept a lower standard of living in retirement-and neither of them are good," Robert Johnson, chairman and CEO at Economic Index Associates, told Newsweek.
Over half of pre-retirees are considering taking up a side gig during retirement to bridge the financial gap. Among Americans aged 50 and older-mostly Gen Xers-who have not yet given up work, 63 percent say they have considered taking on a side hustle to raise some extra cash once they exit the workforce.
Other survey results reflect the same anxiety held by Gen X, with many retired Americans grappling with the reality of post-working life and financing it, which falls short of their expectations.
However, only a small portion of the population is turning to supplemental income sources. While 92 percent of retired Americans report not having a side gig, 60 percent say they wish they did.
For those who have taken on part-time work in retirement, the experience appears to be positive. The study found that an impressive 93 percent of retirees with a side gig said they enjoy the work, and more than half, 55 percent, report that they pursued their side job to stay mentally or socially engaged.
Financial motivations, however, play a key role. Twenty percent took on side gigs to pay down existing debt, while 17 percent said they aimed to fund a more ideal retirement lifestyle.
"The definition of-and classic timeline for-retirement is changing," said Andrew Crowell, financial adviser and vice chairman of wealth management at D.A. Davidson. "While many retirees might picture never working again, a side gig in retirement can be a fun and meaningful way to stay engaged in the community while supporting a more ideal retirement overall."
Setting up a side hustle in your later years can be a boon, but it's not without its hurdles, explains Zack Swad, president and wealth manager at Swad Wealth Management.
"America is a land of opportunity. Unlike past generations, people today have the ability to learn virtually anything online, build side hustles, and create their own careers," he said. "But with that opportunity comes responsibility and often, a lack of structure. Without employer pensions or consistent guidance, more of the retirement burden falls squarely on individuals."
Aging can also get in the way of pursuing new income avenues.
"Health-their own or the health of a loved one," is a big factor in whether any sort of work is still tenable in later life, Johnson said. "People may want to continue working past retirement age but simply may not physically be able to do so."
Many older Americans are considering or have already taken on side hustles or other work during their later years, and it's not without good reason.
The Schroders 2024 U.S. Retirement Survey, published in December, found that Gen Xers anticipate having just shy of $603,000 in retirement savings when they stop working, but they believe they'll need just over $1,069,746 to fund an ideal retirement. Only 14 percent of Gen Xers felt that they had saved enough to live on in their later years.
Another study, by Transamerica Center for Retirement Studies, found that more than half of current workers-52 percent-plan to work at least part-time in retirement. Almost seven in 10 workers-69 percent-said they could work until retirement age and still not save enough to meet their needs.
"The biggest challenge facing today's pre-retirees is financial uncertainty-rising health care costs, inflation and longer life expectancies have made it harder than ever to retire comfortably," Brian Harrison, financial planner and president of SAVVI Financial, told Newsweek. "Many individuals haven't saved enough, and even those who have are struggling to manage their retirement funds efficiently."
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