Americans face the reality of a 40-year retirement with most not ready, says new study

The retirement equation is shifting and many Americans are struggling to keep up as longer lifespans, shorter careers and persistent financial strain reshape expectations across all age groups.

Manulife John Hancock’s newest Financial Resilience and Longevity Report draws from more than 2,500 retirement plan participants and over 500 retirees and documents a retirement journey that’s lengthening and growing more uncertain.

While roughly a third of workers expect to delay retirement, the data shows reality trending in the opposite direction with 52% of retirees saying that they left work earlier than planned, most often because of personal health concerns rather than financial readiness.

Only 46% of respondents who retired ahead of schedule had a formal plan in place and 45% say their financial stress actually increased in retirement while 75% regret not saving more.

Workers are now spending 4.6 hours a month tending to personal finances during work hours, and 16% report missing at least one day of work in the past six months due to financial stress, levels not seen since the height of the pandemic. For employers already dealing with absenteeism and productivity loss, these trends highlight the business impact of financial insecurity.

"People are living longer than ever, and there’s an opportunity and increased need to provide support to plan participants in preparing for a longer retirement," says Aimee DeCamillo, Global Head of Retirement and Wealth at Manulife Wealth & Asset Management. "Our mission is clear: give employers and advisors the capabilities to help plan participants save earlier, invest smarter, and retire on their terms with security, and dignity."

Generational differences further complicate the picture with younger Americans, especially Gen Z, more focused on basic expenses and emergency savings, while older cohorts place retirement squarely at the top of their financial goals. The ideal retirement age for Gen Z is just 59, a full decade younger than their expected retirement age of 67.

Millennials, Gen X and Baby Boomers, meanwhile, now expect to work until 69. Across the board, younger workers are more anxious about inflation: 57% of Gen Z and 59% of Millennials cite cost-of-living concerns, compared with 39% of Boomers.

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The report calls on industry professionals to rethink engagement, particularly for younger demographics who may benefit from interactive planning tools, small-group education, and relatable personal stories that demystify the process. The goal is to spark what the report describes as “aha!” moments that can nudge participants toward earlier and more consistent action.

“Our research over the past decade shows that Americans continue to feel the pressure of rising costs and competing financial priorities, which has impacted their confidence in their retirement planning,” says Wayne Park, CEO of Manulife John Hancock Retirement.