diff --git a/pkg/retry/retry.go b/pkg/retry/retry.go
index 171fcc87b..fd17eefc4 100644
--- a/pkg/retry/retry.go
+++ b/pkg/retry/retry.go
@@ -23,8 +23,10 @@ type IsRetryable func(error) bool
 
 // Settings aggregates optional settings for WithBackoff.
 type Settings struct {
-	// If >0, Timeout lets WithBackoff stop retrying once elapsed,
-	// but allows the RetryableFunc its execution time and **doesn't abort** it if it exceeds Timeout.
+	// If >0, Timeout lets WithBackoff stop retrying gracefully once elapsed based on the following criteria:
+	// * If the execution of RetryableFunc has taken longer than Timeout, no further attempts are made.
+	// * If Timeout elapses during the sleep phase between retries, one final retry is attempted.
+	// * RetryableFunc is always granted its full execution time and is not canceled if it exceeds Timeout.
 	// This means that WithBackoff may not stop exactly after Timeout expires,
 	// or may not retry at all if the first execution of RetryableFunc already takes longer than Timeout.
 	Timeout time.Duration
@@ -50,6 +52,7 @@ func WithBackoff(
 	}
 
 	start := time.Now()
+	timedOut := false
 	for attempt := uint64(1); ; /* true */ attempt++ {
 		prevErr := err
 
@@ -80,6 +83,19 @@ func WithBackoff(
 			return
 		}
 
+		select {
+		case <-timeout:
+			// Stop retrying immediately if executing the retryable function took longer than the timeout.
+			timedOut = true
+		default:
+		}
+
+		if timedOut {
+			err = errors.Wrap(err, "retry deadline exceeded")
+
+			return
+		}
+
 		if settings.OnRetryableError != nil {
 			settings.OnRetryableError(time.Since(start), attempt, err, prevErr)
 		}
@@ -87,9 +103,10 @@ func WithBackoff(
 		select {
 		case <-time.After(b(attempt)):
 		case <-timeout:
-			err = errors.Wrap(err, "retry deadline exceeded")
-
-			return
+			// Do not stop retrying immediately, but start one last attempt to mitigate timing issues where
+			// the timeout expires while waiting for the next attempt and
+			// therefore no retries have happened during this possibly long period.
+			timedOut = true
 		case <-ctx.Done():
 			err = errors.Wrap(ctx.Err(), err.Error())