Strategies for a successful retirement

The traditional vision of retirement at 65 is evolving. While more Americans are extending their careers into their late 60s and beyond, the majority have left the workforce. Full-time workers in this age group often enjoy solid earnings, but for most retirees, income comes primarily from Social Security and cautious withdrawals from savings. This contrast highlights important trends in labor participation, spending habits, and long-term financial planning.

Strong Earnings for Those Who Keep Working

Full-time wage and salary workers aged 65 and older earned a median of $1,246 per week in the first quarter of 2026—roughly $64,792 annually. This paycheck is more than 2.5 times the typical Social Security benefit, offering a meaningful financial boost for those who remain employed.

Yet these figures do not represent the average experience. Most people 65 and older are retired. Labor force participation for this group stands near 19%, meaning fewer than one in five are working or looking for work. Their share of the total U.S. workforce remains small, though numbers have grown steadily. Participation has risen from about 11% in 1987 to nearly 20% in recent years.

Of those still working past 65, roughly 38% are part-time, compared to just 11% of prime-age workers. Women are more likely than men to choose reduced hours. Many cite flexibility, health considerations, or supplemental income as reasons for staying engaged rather than fully retiring.

Leisure, Expenses, and Retirement Realities

Retirees gain significant free time, averaging 7.1 hours daily on leisure and sports—nearly three hours more than adults aged 25-54. Much of this is spent watching television (4.3 hours), with smaller portions for reading, socializing, and relaxation. Despite more downtime, living costs persist. Households headed by someone 65 or older spend an average of $61,432 per year, with housing comprising over one-third of the budget.

Social Security as the Foundation

Social Security plays a central role for retirees. The average annual benefit is approximately $24,852, and about 40% of recipients rely on it as their main or only income source. Many supplement this with conservative draws from retirement accounts. A 2025 study found married couples aged 65+ typically withdraw just 2.1% of savings annually—about half the classic 4% guideline.

Modest nest eggs explain the caution. Median 401(k) balances at retirement hover around $95,000, enough to cover roughly 1.5 years of typical expenses for this age group. Concerns about longevity are common, with 40% of Baby Boomers fearing they may outlive their savings.

Strategic Decisions on Claiming Benefits

Timing Social Security claims can dramatically affect lifetime income. Delaying past full retirement age earns an 8% annual credit until age 70. Someone eligible for $2,000 monthly at full retirement age could increase their benefit to more than $2,640 by waiting, with ongoing inflation adjustments providing further protection.

However, most people claim earlier. Only about 4% wait until 70. Health issues, immediate cash needs, or worries about future program changes drive many to start at 62. Claiming at 62 instead of 70 can reduce monthly income by an average of $851, totaling over $204,000 less over 20 years (excluding COLAs). This decision carries lasting consequences.

Broader Implications for Retirement Planning

The data reveals a tale of two retirements. Full-time workers over 65 benefit from higher earnings and potentially delayed drawdowns on savings. For the broader population, success depends on maximizing Social Security through delayed claiming when feasible, maintaining reasonable expenses, and building sufficient savings earlier in life.

As life expectancies rise and pension plans decline, working longer—whether full- or part-time—has become a practical strategy for many. It provides income, health coverage, and purpose while allowing savings to grow. Others prioritize leisure and manage with benefit-focused budgets.

Ultimately, understanding these patterns empowers better decisions. Whether continuing to work or embracing full retirement, a clear view of earnings potential, benefit rules, and realistic spending needs is essential for financial confidence in later decades.

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