75, divorced, with a dog.

"Why don't you retire?" It was a simple enough question I asked an employee in the branch I worked in as OSJ. He was certainly older than 65, 67, or even 70. And yet he stayed on year after year. A simple question but he about bit my head off. "I'm 75. I am divorced and I got a dog. What do you want me to do? Sit at home and watch TV?"

Wow. Wasn't expecting that response. Once he had calmed down and realized I was genuinely curious about his situation, he cooled off and explained. Work was part of his identity. Work gave him purpose. Work gave him a reason to get out of bed. He had a place to go, a place to be, a place where his worth was seen and rewarded.

I had forgotten about this conversation of 20 years ago until I read a CNBC article on why Americans are working well past 65 or even 67. Here are a few thoughts:

Americans are working beyond age 65 due to a combination of financial, health, and personal reasons:

1. Inadequate Retirement Savings – Many have not saved enough for retirement due to rising costs of living, market volatility, and insufficient pension plans.
2. Healthcare Costs – With increasing medical expenses and the high cost of long-term care, working longer helps maintain employer-provided insurance and financial stability.
3. Longer Life Expectancy – People are living longer, requiring more income to sustain a comfortable retirement.
4. Social Security Incentives – Delaying Social Security benefits increases monthly payouts, motivating some to keep working.
5. Job Satisfaction – Many older workers enjoy their careers and prefer to stay engaged rather than retire.
6. Lack of Defined Benefit Pensions – The shift from pensions to 401(k)-style plans puts the burden on individuals to fund their own retirement, often leading to shortfalls.
7. Economic Uncertainty – Inflation, housing costs, and market fluctuations make some hesitant to stop earning a paycheck.
8. Employer Demand – Businesses increasingly value experienced workers, leading to more opportunities for older employees.

I have ruminated on all of these over the past 35 years in the industry. I have thought about them more as I think about working another 15 or so years. Would I ever stop working? Even if I am not running Green Retirement, I might have a dog walking business. I just cannot see myself sitting at home, watching TV. Digging in to these 8 factors, I would say:

1. Inadequate Retirement Savings

• Many Americans have not saved enough to retire comfortably. A 2023 study found that the median retirement savings for people aged 65–74 is around $426,000, but many experts suggest that even $1 million may not be enough due to rising costs.
• The shift from pensions to 401(k)s means individuals must manage their own investments, and many underestimate how much they’ll need.
• The 2008 financial crisis and more recent market downturns have depleted many people's savings, forcing them to work longer to rebuild their nest eggs.

2. Rising Healthcare Costs

• Healthcare costs continue to increase, with the average retired couple needing over $315,000 just to cover medical expenses in retirement.
• Medicare doesn’t cover everything—long-term care, dental, vision, and prescription costs can add up.
• Some workers stay employed longer to keep their employer-provided health insurance, which is often more comprehensive than Medicare.

3. Longer Life Expectancy

• In 1950, the average life expectancy in the U.S. was 68 years. Today, it's around 77 years—meaning many people will live 20–30 years in retirement.
• A longer retirement requires more savings, and some fear running out of money before they die.

4. Social Security Incentives

• Claiming Social Security at 62 results in a permanent 30% reduction in monthly benefits.
• Waiting until 70 increases benefits by 8% per year after full retirement age (67 for most people).
• Many choose to work longer to maximize their Social Security payments.

5. Job Satisfaction & Purpose

• Some simply enjoy working and find meaning, social interaction, and mental stimulation in their jobs.
• Many retirees experience boredom or depression after leaving the workforce, leading them to return to work.

6. Decline of Traditional Pensions

• In 1980, 60% of private-sector workers had a defined-benefit pension. Today, fewer than 15% do.
• Most now rely on 401(k)s and IRAs, which depend on individual contributions and market performance.
• Without a pension guaranteeing income, many feel safer continuing to earn a paycheck.

7. Economic Uncertainty & Inflation

• Housing, food, and energy costs have risen sharply in recent years, reducing purchasing power.
• Inflation erodes the value of fixed retirement incomes, leading some to work longer to maintain their lifestyle.

8. Employer Demand for Older Workers

• With labor shortages in many industries, employers are increasingly open to hiring and retaining older workers.
• Some companies offer flexible schedules, part-time work, or consulting roles, making it easier to keep working beyond 65.

Of course, folks are reading this article are looking for solutions. These could include:

1. Maximize Retirement Savings Early

• Increase 401(k) & IRA Contributions – Take advantage of employer 401(k) matching and contribute the maximum allowed ($23,000 in 2024, plus a $7,500 catch-up if over 50).
• Roth Conversions – Convert traditional IRA/401(k) funds into Roth accounts to reduce future tax burdens.
• Use HSA as a Retirement Tool – A Health Savings Account (HSA) can be a tax-free way to cover medical costs in retirement.

2. Reduce Expenses & Optimize Lifestyle

• Downsize Early – Consider moving to a lower-cost home before retiring to lower expenses and free up equity.
• Geoarbitrage – Relocate to a state or country with lower living costs and no state income tax.
• Eliminate Debt – Pay off mortgages, credit cards, and loans before retiring to reduce financial pressure.

3. Generate Passive & Alternative Income

• Invest in Income-Producing Assets – Dividend stocks, rental properties, REITs, and annuities can provide passive income.
• Side Businesses & Consulting – A small business, freelance work, or part-time consulting can bridge income gaps.
• Social Security Planning – If you plan to retire early, ensure you have a strategy to cover living expenses before claiming Social Security at full retirement age or later.

4. Control Healthcare Costs

• Plan for Pre-Medicare Insurance – If retiring before 65, look into COBRA, ACA marketplace plans, or healthcare-sharing programs.
• Use an HSA – If available, contribute to an HSA and let it grow tax-free to cover medical expenses later.

5. Invest Smartly & Minimize Taxes

• Diversify Investments – Have a mix of stocks, bonds, real estate, and other assets for balanced risk.
• Tax-Efficient Withdrawals – Withdraw from taxable accounts first, then tax-deferred, and finally tax-free accounts (Roth) to minimize taxes.
• Consider a Roth Conversion Ladder – This strategy can allow penalty-free withdrawals before 59?.

The Parting Glass

These look simple on the computer screen (ie, geoarbitrage) but in may be difficult to enact. When I started in the industry, the general idea was to retire to Florida. At the time, it is was warmer, cheaper, and generally sunny all year around. With climate change, all bets are off.

Instead I would suggest really thinking about where you might want to retire, how much it realistically will cost, and how long you might need to save to meet that. It is better to plan now than find yourself at the cusp of retirement without a plan.