Approximately 69% of workers in the United States believe their savings will not be enough when they retire, even if they work until the conventional retirement age. This figure, taken from a report by the Transamerica Center for Retirement Studies, is significant.
It reflects a structural gap between what Americans accumulate and what they need. The median savings for those between 55 and 64 years old is around $185,000, while the goal that many financial planners consider necessary for a comfortable retirement exceeds one million dollars. The gap between these two figures largely defines the debate about when the right time is to leave the workforce.
The Statistic Keeping Most Americans Away from Retirement
Waiting an extra year before retiring isn’t an emotional or philosophical decision. It’s primarily a matter of arithmetic. The factors that tip the scales toward delaying retirement are identifiable and measurable, and they don’t depend on risk tolerance or the worker’s mood. They depend on concrete variables: debt levels, health insurance coverage, and the structure of post-retirement time.
The first factor is high-interest debt. Credit cards, unsecured personal loans, and high-interest lines of credit directly drain your fixed retirement income. If these obligations remain after you leave your job, a portion of your monthly withdrawals will go toward paying them off, reducing the amount available for everyday expenses. An additional year of employment income can be used to eliminate these balances or substantially reduce them, changing your retirement financial structure from the very first month.
The Gap in Health Coverage Between the Ages of 64 and 65
The second factor involves the health system. Medicare, the federal health insurance program for older adults, has eligibility starting at age 65. Those who retire at 64 face a period of exposure: they can continue their employer-provided plan through COBRA or purchase a plan on the insurance market, but both options involve costs that, in numerous instances, force early withdrawals from savings accounts.
The monthly premiums of Medicare Part B in 2026 range from $202.90 to $689.90, depending on income level. This range illustrates the variability of medical expenses and their potential impact on a retirement budget.
Additionally, early retirement that involves income during the period before Medicare may affect eligibility for Marketplace subsidies. Planning for that specific interval—between leaving employment and activating Medicare—requires a separate analysis from the rest of retirement planning.
The Timing of Social Security as a Long-Term Variable
The third factor operates over time. Social Security applies an 8% penalty for each year the beneficiary claims before reaching the full retirement age, which is 66 or 67 years old depending on the date of birth.
The same logic works in reverse: each year the worker waits beyond that age—up to a maximum of 70 years old—increases the monthly benefit by approximately 8%. Over a life expectancy of two decades post-retirement, that cumulative difference is significant.
The fourth element, less quantifiable but well-documented, is the structure of leisure time. Thirty-six percent of workers in the United States expect to retire at age 70 or older, or report having no retirement plans. Among the reasons researchers have identified, the lack of a concrete plan for filling post-employment time appears repeatedly. An additional year of work can be used to design that structure, not just to accumulate capital.
The Hidden Tax Trap Waiting for Retirees Over 73
The analysis is not one-sided. Remaining in the workforce longer than necessary has its own costs. Chronic work-related stress is clinically associated with hypertension, persistent headaches, and an increased risk of cardiovascular disease and stroke. Each additional year worked is simultaneously one less year available for retirement in relatively good health.
There is also a tax variable. Those who remain employed beyond the age of 73 must consider the minimum required distributions (RMDs) on their deferred retirement accounts. These distributions, required under federal law, generate taxable events that can increase the tax burden in years when the worker still receives earned income. The combination of both flows—salary and RMD—can place the taxpayer in a higher tax bracket than they would face if they had withdrawn those funds during a year without earned income.
