Americans rewrite retirement rules amid decisive shift towards non-traditional pathways

Americans are increasingly reshaping how they approach retirement, with new research showing growing optimism about retirement prospects alongside a decisive shift toward flexible, non-traditional pathways.

Fidelity Investments’ 2026 State of Retirement Planning Study found that 72% of Americans expect to retire on their own terms (up five percentage points from last year) as nearly seven in 10 consider alternative approaches to retirement. The firm said the improved outlook is tied in part to renewed focus on preparation, with nearly three-quarters of respondents reporting they have a plan in place to reach their retirement goals.

The findings reflect what Fidelity describes as a “new retirement playbook,” in which individuals rethink not only when they retire but how they remain engaged in work and life during the transition. About 61% of Americans say they intend to phase into retirement, with common alternatives including gig work and side hustles, launching small businesses, consulting part-time or switching industries altogether.

“Retirement is being reframed, it’s no longer a single date and instead is an adaptable stage in the next chapter,” said Rita Assaf, vice president of retirement offerings at Fidelity Investments. “As Americans lean into this new retirement playbook, the importance of planning becomes even more pronounced. Knowing what a phased or transitional path can look like in your situation—and how to make sure your financial plan such as your withdrawal strategies and health care coverage can work with your emotional plan —can be a differentiator in achieving the retirement you envision.”

Retirement increasingly seen as a transition

The study underscores a broader redefinition of retirement as a gradual shift rather than a fixed milestone. Six in 10 Americans say they have a strategy to transition into retirement, while nearly one in four remain unsure about the age they will ultimately stop working. Another 6% say they never expect to retire.

Many investors anticipate scaling back work commitments before fully retiring. Roughly 34% plan to reduce hours, 30% expect to take on fewer responsibilities and 18% foresee moving into freelance or contract roles, while about one-third say they will continue working at their current pace until retirement.

Generational differences are also emerging. Younger workers are especially open to phased retirement, with nearly eight in 10 Gen Z respondents and more than six in 10 Millennials expecting to gradually incorporate different forms of work into their retirement years.

Economic realities remain a central factor influencing retirement decisions. Rising living costs have become the most significant competing savings priority across generations, and more than half of Americans say the cost of living has diverted funds that might otherwise be earmarked for retirement.

Short-term concerns such as inflation, monthly bills and unexpected expenses are also weighing on households, reinforcing the need to balance immediate financial obligations with long-term retirement goals. Affordability is a key reason some expect to keep working indefinitely, though many also cite personal motivations such as staying active, enjoying their careers or continuing to build wealth.

Healthcare costs represent another looming challenge. Eight in 10 Americans anticipate high medical expenses in retirement, prompting many to increase contributions to retirement accounts or explore health savings accounts and supplemental insurance options.

Professional guidance seen as critical

Despite these challenges, retirement planning remains widespread. About 74% of Americans say they have outlined a strategy to reach their retirement goals, and those with a financial plan are more than twice as likely as their peers to feel confident about their retirement prospects.

The data also points to opportunities for advisors to help clients streamline retirement savings. Americans report working for an average of six employers during their careers, and nearly one-quarter of retirement savers still hold multiple accounts from past or current jobs — highlighting the importance of consolidation strategies to improve coordination of income withdrawals and tax planning.

“The heart of the new retirement playbook is keeping things personal and practical,” Assaf said. “Planning is what turns preference into payoff. With the right plan—built around retirement income, taxes, health care, and consolidation, investors can have the tools in their corner to help define a successful retirement journey.”

Overall, Fidelity’s research suggests retirement is evolving into a more personalized, flexible phase shaped by both financial necessity and individual preference — trends that could significantly influence how advisors help clients prepare for life after full-time work.