Key takeaways
- More seniors are returning to work because Social Security and savings are no longer keeping up with the rising costs of health care, housing and everyday necessities.
- One in five Americans over age 65 has returned to the workforce, and projections show that number will rise even more.
For older adults across the United States, returning to work is becoming less of a lifestyle choice and more of an economic necessity. While some are returning to work because they find it meaningful, rising inflation, rapidly rising medical costs, and rising prescription drug bills are forcing many retirees to return to the workforce, whether behind pharmacy counters, in grocery store aisles, or behind the wheel of a carpool.
“The narrative around ‘active aging’ often masks a hard truth: Most seniors working past age 70 aren’t there because they love their job at the grocery store. They’re there because they can’t cover rent and prescriptions,” said Sadler Hayes, president of Sadler Hayes Associates in New City, New York. investopedia.
Fixed incomes simply cannot keep up with rising costs. For a growing number of Americans, the traditional retirement plan for those over 65 is becoming a luxury that few can afford.
The silver surge
After a wave of pandemic-related retirements, older Americans are returning to the workforce. In 2024, about a fifth of people aged 65 and over were working or looking for work. In fact, labor force participation rates show that people ages 65 to 74 had the biggest jump between 2014 and 2024, with participation at its highest rate in decades. Projections from the US Bureau of Labor Statistics (BLS) call for a further increase to 29.6% by 2034, while participation among those over 75 will rise to more than 10%, suggesting that “retirement” is becoming an increasingly elastic concept.
As inflation rises again after retreating from pandemic highs, price pressures have often been greatest in basic areas such as health care, food and housing. These high costs are especially burdensome for those living on a fixed income.
The economics behind those who adopt survival change
Social Security does not keep pace with inflation: Annual cost-of-living adjustments (COLAs) to Social Security are required by law to match overall inflation in a year across the United States, but they do not offset price increases in key areas most likely to affect older adults, such as housing and health care costs. Overall, advocacy groups estimate that benefits have lost about 20% of their real purchasing power since 2010, contributing to why so many retirees say they feel squeezed.
Rising Medicare and Prescription Costs: Out-of-pocket health care costs are another inevitable expense that retirees should plan for. The standard monthly premium for Medicare Part B, for example, increased to $185.00 in 2025 from $174.70 in 2024. While the Inflation Reduction Act caps out-of-pocket costs for Part D prescription drugs at $2,000, Hayes notes that “seniors still face other costs that can challenge fixed incomes, especially those with multiple conditions.”
Reduced retirement savings: Changes in the stock and bond markets, longer life expectancies, and uneven savings have left many older workers approaching (or in) retirement with limited financial protections. Vanguard found a median 401(k) balance of just $88,488 in 2023 among people age 65 and older, which is well below what most experts say is needed to cover ongoing housing, food and healthcare costs for decades in retirement.
“Retirement” is becoming more of a continuum and less of a cliff: part-time income, project-based jobs, repeat careers, and periods of hiatus, often for caregiving. As people live longer and traditional pensions have virtually disappeared for most workers, jobs in old age are likely to continue to become more common.
