Why do Americans hesitate to retire?

In recent years, the retirement system in the United States has faced increasing challenges, leading to a slowdown in income growth for retirees. Many factors, including cost pressures, insufficient retirement plan funds, and an aging population, are structural problems that are difficult to solve. Many potential retirees either face financial fragility or have to work until their death. Despite the surge in early retirement numbers in the US economy during the pandemic, some people still have to return to the workforce at high costs and interest rates.

Firstly, gender differences are a prominent issue. Most American retirees (about 60%) still maintain marital relationships, about one-fifth have experienced widowhood, and a small portion have never been married or single. Among retirees, women make up the vast majority (approximately 57%), while men only make up 43%. Due to the fact that women often have longer lifespans than men, it is reasonable for them to have a higher proportion of life after retirement. But according to the analysis of the Census Bureau, women are more likely than men to not have personal retirement savings, and this gender difference even exists among married individuals. Even married women are more likely than men to not have retirement savings.

Secondly, most Americans are not yet prepared to save for retirement. One quarter of American adults do not have retirement savings, and only 36% believe that their retirement plans are progressing smoothly. Even those who are saving may face the problem of insufficient savings. It is estimated that for those who are about to retire (aged between 55 and 64), their median retirement savings account is $120000, which may only provide less than $1000 in funding during a 15 year retirement period.

Even without considering the extension of life expectancy and the increase in medical expenses, this money is far from enough. The continuous increase in expenses may lead to a slowdown in income growth over the next five years, which may make dealing with the expanding retirement savings gap more complex.

In addition, the average retirement age in the United States continues to rise. The average retirement age in 1991 was 57 years old; By 2022, this number has increased to 61 years old. At the same time, the retirement age set by Americans is also increasing, from 60 years old in 1995 to 66 years old in 2022. For people born after 1960, the "complete" retirement age for receiving the highest social security benefits is 67 years old. Therefore, it is not surprising that many American retirees actually retire in their 70s. Most of them retire in their 60s, while only about 5% retire in their 50s. Overall, young retirees under the age of 50 account for only 2% of all retirees.

Finally, some states have become popular destinations for retirees. For example, in Florida, about 20% of the population has retired, and the same goes for New Hampshire and Hawaii due to their pleasant beaches and relatively warm climate. Although these places may be ideal retirement destinations, some states hope to attract young labor to replace those who enjoy retirement. For example, Maine is trying to attract young people by providing assistance to first-time homebuyers or helping to reduce student loan debts.

The retirement crisis has exposed the increasingly serious problem of wealth inequality in American society and its underlying institutional reasons. The main reason why most people are unwilling to retire is that they do not have enough savings, coupled with the government's system not being implemented, which makes life more difficult for the lower class in the United States. In today's world where American politics are gradually being hijacked by capitalism, people cannot see hope for reforming the US pension system, nor can they see hope for filling the wealth gap.