For many Americans, their vision of retirement doesn't include long days gardening, or sunning on the beach. Instead, it involves more work -- either because of jobs they enjoy or, more commonly, financial need.

Research from Allianz Life shows an estimated 65% of people think it's likely they'll work either part time or full time in retirement. Perhaps unsurprisingly, however, the actual number of retirees still holding jobs is far smaller. 

Older woman working stocking shelves.

Image source: Getty Images.

How likely are you to work in retirement?

Shockingly, just 7% of current retirees report they've continued working at least part time, the research shows.  

Sometimes, people change their plans for working because they simply no long want to. In fact, Allianz Life's data reveals that many older Americans lose interest in working longer as they age. But more often than not, those who planned to work are surprised to find themselves unable to because they have family members to care for, health issues of their own, or can't find an employer. 

That's a big problem: Those who plan to work but can't are often forced to live on savings sooner and draw down their accounts too quickly. Retiring earlier than planned also means shrinking their investment accounts, rather than having extra months or years to bulk them up. And potentially, they could be forced to claim Social Security early, thus reducing benefits

Since it seems very unlikely you'll end up working in retirement, it's crucial you don't plan on having a paycheck. Instead, when setting savings goals, assume you'll claim Social Security at the earliest allowable age (62) and that you'll start tapping your investments then, too. This will mean you need to save substantially more for your later years.

For example, if you expect a monthly Social Security benefit of about $1,500 at a full retirement age of 67 and you want annual income of $50,000 total, retiring at 67 would mean you're investments must produce $32,000 a year. You'd need about $800,000 invested to produce that much if you follow the 4% rule. So to save $800,000 by 67, you'd need to save about $318 per month if you start at 30 and earn a 7% average annual return. 

But if you retire and need to claim Social Security at 62 instead, the 30% benefit reduction would mean you'd receive just $1,050 per month. To have that same $50,000 income if you retire at 62, your investments must produce around $37,400 annually. So you would need a nest egg of around $935,000. To hit that savings target by age 62, you'd need to save around $589 per month if you start at age 30.

That's a huge difference in your savings goals. But you can't afford to assume you'll continue working late in your life, with so few seniors doing it. So preparing for the worst-case scenario by saving a higher amount is your best bet.