Nearly half of Americans see a slow shift, not a clean break in retirement

A growing number of Americans view retirement as a gradual transition rather than a distinct moment to leave the workforce, according to the 2024 Annual Retirement Study from Allianz Life.

The study reveals that 47 percent of Americans now see retirement as a gradual shift away from full-time work, while only 38 percent still view it as a clear-cut date to stop working and draw down on retirement assets. Meanwhile, 15 percent of respondents say they never plan to slow down or retire.

“In the past, retirement started abruptly on your last day of work but that idea is changing,” Kelly LaVigne, vice president of consumer insights at Allianz Life, said in a statement. “Many Americans are thinking about slowly working less and less as they age.”

Generational differences were clear to see in the data, with baby boomers leading the shift in retirement mindset. According to the study, 58 percent of boomers consider retirement a gradual transition, compared to 53 percent of Generation X and 45 percent of millennials.

Ethnically, the slow transition view is most common among Asian/Asian American respondents (56 percent), followed by Black/African American (49 percent), white (48 percent), and Hispanic respondents (46 percent).

As Americans consider longer life expectancies and their outlook for financial stability, nearly seven in ten (68 percent) believe people should expect to work later in life to secure enough funds for retirement. Additionally, 61 percent expect that they will need to work during retirement to meet their financial needs, with the average respondent anticipating nearly 30 years of retirement.

“Some people may want to slowly transition away from full-time work in order to stay busy, but for many Americans, it is necessary to feel financially confident that your money will last your lifetime,” LaVigne explained. “Working longer will put off when you start drawing down on retirement assets. You could also benefit from staying on an employer health plan.”

An 80 percent majority believe that working longer or retiring later would help ensure financial support for their lifestyle. About 63 percent say they plan to continue working part-time during retirement to supplement their income, with millennials (64 percent) and Gen Xers (64 percent) most likely to express this intention, compared to 59 percent of boomers.

Hispanic respondents (71 percent) are more likely to plan on working part-time in retirement than white (64 percent), Black/African American (61 percent), and Asian/Asian American respondents (60 percent).

“Working later in life can help you put away more money, postpone withdrawing from retirement accounts, delay taking Social Security, and hopefully have a more enjoyable time once you actually do leave the workforce,” LaVigne said.