America's Retirement Dream is Dying

The dream of retiring after 60 is slowly dying among Americans, with one in four workers aged 50 and above who haven't yet left the workforce believing they'll never retire, according to a recent survey.

The main issue emerging from the latest American Association of Retired Persons (AARP) Financial Security Trend Survey conducted by the nonprofit, nonpartisan organization in January 2024 is that older Americans are worried about their finances and can't save enough money for retirement. About one in four respondents to the survey have no retirement savings due to everyday expenses and high housing costs, and 37 percent are worried about having enough money to afford basic living costs.

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Despite inflation easing, the higher cost of living, the unaffordability of the housing market and the struggles faced by older Americans are likely to be crucial issues in the months leading up to the November election.

The AARP's survey was based on interviews with over 8,000 people made in coordination with the NORC Center for Public Affairs Research. It found that the number of Americans aged 50 and older who didn't think they'd ever retire was more or less unchanged compared to January 2022 and July 2022, when it was 23 percent and 24 percent, respectively. The study is conducted twice a year.

The graying American workforce—whose median age has climbed from 40 in 2002 to 41.8 in 2022, according to the Bureau of Labor Statistics—has embraced a growing number of older workers in the past few years. According to a recent Pew Research Center report, about one in five Americans aged 65 and older were still employed in 2023—nearly twice as many as 35 years ago.

Recently released Census Bureau data based on the 2022 congressional elections showed that voters aged 65 and above made up 30.4 percent of all voters, while younger generations like Millennials and Gen Z made up only 11.7 percent of all voters.

"In recent decades, on average people have retired a few years earlier than they hoped due to unexpected health issues or because they were pushed out of the workforce," Alexandre Frenette, an assistant professor of sociology at Vanderbilt University, told Newsweek.

"On the face of it, if older adults are working later in life this might suggest some positive developments—people are staying healthier longer, and employers are increasingly valuing the benefits of experience among workers in their late 60s-70s, but I'm not sure the latter is correct," he added.

"With changes in the economy since the 1980s, workers navigate a knowledge economy where they must constantly replenish their skills, or a service economy marked by relatively low-paying jobs," Frenette explained.

This split between the knowledge economy and the service economy has exacerbated the existing wealth gap in American society, "partly driven by the gap between 'good' and 'bad' jobs—or stable, well-paid jobs with benefits versus unstable, lower paid jobs offering little to no benefits," Frenette said. Many of the lower paying, less stable jobs are in the service economy.

"There has been a lot of trepidation lately about workers getting replaced by AI, though as one's career advances a larger concern, at least for now, is the stigma of old age," Frenette said. "Many aging workers must switch from good jobs to bad ones to support themselves, especially those people left behind by changes in the economy," he added.

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While the rise in the number of older Americans still in the workforce could undermine young people's opportunities for higher-wage, senior jobs, the youngest and oldest workers have a lot in common: "Their standing in the workforce is most precarious," Frenette said.

"The dream of retiring early probably seems far-fetched for most workers in their 20s and 30s today who have been unable to purchase a home and are saddled with debt."

Do you fear you'll never be able to afford to retire? Let us know. Contact g.carbonaro@newsweek.com