It's no secret that many Americans are struggling to save enough for retirement. When increasing savings rates is not an option, many plan to extend their time in the workforce, and some people are taking this to the extreme. 

About 23% of Americans say they're never going to retire, according to a recent AP-NORC Center for Public Affairs Research survey. An additional 23% said they intended to continue working past 65 but did not specify when they expected to retire.

Senior businesswoman talking on phone

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For those with small retirement nest eggs, this is certainly a better plan than running out of money, but it's not realistic for everyone. You still need a backup plan in case life forces you to retire early.

The problem with planning to never retire

The benefits of delaying retirement are obvious: You give yourself more time to save for retirement while simultaneously reducing the amount of savings you need to cover your living expenses. In theory, skipping retirement altogether enables you to live comfortably into your old age while reducing the savings burden on you while you're young. The trouble is, it takes only one bad break to bring down the whole house of cards.

A job loss, serious illness or injury, or caring for an ailing family member could all force you to enter retirement whether you want to or not -- and whether you're ready for it or not. If you'd let your retirement savings slide when you were younger or you didn't bother saving at all because you thought you'd be able to keep working, you could struggle to get by and may have to rely on family members to support you. Some people do work happily into their 70s or 80s, but you can't know if that will be an option for you, so you have to plan as if it's not.

Create a retirement plan anyway

For the best chance at retirement security, you need to think worst-case scenario. How much savings would you need to live on if you were forced into retirement due to health, family, or career reasons?

Estimate your life expectancy. This varies based on genetic and lifestyle factors, but it's not unreasonable to think you could live past 90 or even 95 if you're reasonably healthy. Subtract from this your retirement age. It's up to you to decide what to use here, but don't figure too high. Stay within the 65 to 70 range. If you're able to keep working past this point, great. But if not, you'll be glad you had the extra savings.

Next, estimate your annual retirement living expenses, including food, housing, insurance, healthcare, and travel. Multiply this number by the estimated years of your retirement, adding 3% annually for inflation. Use a retirement calculator for this. It should ask for an estimated investment rate of return. Go with 5% to 6% if you want to be conservative. Once you've entered all this in, it should give you an estimate of the amount you need to save overall and per month to hit your goal. Subtract from this any money you expect to receive from other sources like a pension, Social Security, or a 401(k) match. The remainder is what you must save independently.

Try to save at least as much as the calculator recommends each month. If you can't, save as much as you can right now and try to free up more cash by cutting back your discretionary spending or increasing your income by pursuing promotions, switching employers, or starting a side hustle. 

You can plan on working late in your life, and if you're able to do so, you can leave a greater legacy for your heirs. But you still need a retirement plan in case things go sideways. If you do end up forced out of your job in retirement without enough savings, you don't have to give up working altogether. Look for a part-time job if you have the time for it. It may not cover all your expenses, but it'll help you stretch your existing savings further and may make the transition into retirement a little easier.