Retirement may seem like a simple decision: we choose an age at which to stop working and build our financial plan around it. But economic reality is more complex. The statutory retirement age does not necessarily mean that an employee will remain able to work and earn income until that age; health issues, job loss, changes in the skills in demand, or rising living costs may intervene, forcing an earlier end to a career than planned.

This gap emerged clearly in the latest survey by the Transamerica Center for Retirement Studies, which included more than 7,600 middle-class people in the United States. Among those who had not yet retired, 33% expected to work until age 70 or older, or never retire at all. But retirees’ experience was different: the median retirement age was 63 for men and 62 for women, and 48% said they had retired earlier than planned.

Although the study is American, the question it raises has also become important in Saudi Arabia: If people expect their careers to last longer, can employees actually remain in the labor market until the age on which they based their financial plans?

When Retirement Is Not Entirely a Personal Decision

Transamerica’s experience reveals that the problem is not always inadequate planning. Among those who retired earlier than expected, work-related factors were among the most prominent reasons, while having insufficient savings was not the main cause of early retirement. In addition, 45% of those who had not yet retired expressed concern that artificial intelligence and robots would make their skills obsolete in the future.

This is where the concept of skills obsolescence (Skills Obsolescence) comes into view: a person may retain extensive experience, yet the market value of some of their skills may decline because of changes in technology, production methods, or the nature of jobs.

This changes how we should think about retirement. The risk is not only that “I will not save enough,” but also that my employment income will stop before the point I assumed in my plan.

Saudi Arabia: A Longer Career Horizon—but Not Under the Same Rules for Everyone

This question is becoming even more important with recent changes to Saudi Arabia’s social insurance system. For those covered by the new Social Insurance System, which applies to new entrants to the labor market after the system took effect, the statutory age for pension eligibility is now 65 years. Early retirement is also possible up to ten years before the statutory age when 360 months of contributions have been completed.

However, it is important not to reduce the change to the statement “the retirement age in Saudi Arabia is now 65.” Those with previous contribution periods are subject to different transitional arrangements, and the statutory age for some people covered by the amendments gradually ranges between 58 and 65, depending on their age and contribution period when the amendments took effect.

The economic significance here is not about age alone. The longer the expected career, the more the ability to remain in the labor market becomes part of the retirement plan itself. Employees need not only to save, but also to maintain employable skills over a longer period.

What Does the Saudi Labor Market Tell Us?

Data from the General Authority for Statistics provide a useful picture, although they do not directly measure involuntary retirement. In the first quarter of 2026, the labor force participation rate among Saudis aged 55 and over was 25.3%, while the employment-to-population ratio for this group was 25.0%.

But these figures need to be interpreted carefully. They tell us whether people are present in the labor market, not why someone left it: Did they retire by choice? Because of health issues? Restructuring? Or weak demand for their skills?

Therefore, within the official data used in this article, there is no Saudi figure that can accurately be described as the “involuntary retirement rate.” This point is important in itself: The absence of a figure does not mean the phenomenon is absent, but it prevents us from assuming its scale without evidence.

Rising Living Costs Change the Retirement Equation

The second problem is that retirement planning takes place while the cost of living itself is changing. In the American survey, 80% of those who had not yet retired said that rising living costs made saving for retirement more difficult. Meanwhile, 42% expected to rely primarily on their personal savings in retirement, compared with 28% who expected to rely primarily on U.S. Social Security.

These percentages cannot be transferred directly to Saudi Arabia; the financial and retirement systems are different. But the economic principle is the same: every riyal spent on current consumption is a riyal not saved or invested for the future.

This highlights the importance of retirement income adequacy—the ability of post-retirement income sources to continuously finance an acceptable standard of living, rather than simply the existence of a monthly pension.

Put more simply, the better question is not “Will I have a pension?” but “Will the combined value of my pension, savings, and investments be enough to cover my expenses when I stop working?”

The Pension Is Not the Entire Plan

Relying on a pension alone ties an individual’s plan to a single source. A more flexible plan views retirement as a combination of the statutory pension, liquid savings, and long-term investments, along with the ability to handle emergencies before reaching retirement age.

This idea goes beyond simply “saving more.” The more important point is to distribute risk. If someone loses their job in their late fifties, for example, having savings and assets independent of their salary gives them more room to make decisions instead of turning the end of employment directly into a financial crisis.

The Risk That Begins After Retirement

Even if a person successfully reaches retirement financially prepared, another risk remains: longevity risk (Longevity Risk)—simply, the possibility of living longer than one’s savings can support.

That is why planning does not stop at determining the amount needed on the day of retirement. The purchasing power of that amount may erode with inflation, healthcare or housing expenses may change, and investment returns themselves are not guaranteed.

In other words, there are two different questions: Do I have enough to retire? And will what I have last throughout my retirement?

Retirement Begins Years Before the Final Paycheck

The most important lesson from the American experience is not that Saudis will follow the same path, but that relying on the ability to work until a specific age is a weak financial assumption if there is no backup plan.

In a labor market changing rapidly with technology and artificial intelligence, updating skills becomes part of financial risk management, just like saving and investing. Maintaining emergency liquidity and diversifying sources of wealth also become more important than building a plan around salary and pension alone.

Ultimately, the retirement age may be a number set by the system, but the actual age at which employment income stops is determined by a much broader set of factors. So perhaps the more realistic question in financial planning is not: When do I want to retire? but: What if I have to stop working before then?