Why 1 in 5 Retirees Are Returning to Work? The Surprising Reasons Behind the Unretirement Wave

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In recent years, the concept of retirement has begun to evolve beyond traditional expectations of leisure and relaxation. A surprising trend has emerged, reshaping our understanding of work and retirement’s roles in life’s later stages. As this phenomenon unfolds, we’re left to wonder: What’s drawing so many retirees back into the workforce?

Rising Inflation


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Based on a recent report from T. Rowe Price, approximately 20% of retirees are already working either part-time or full-time work, while 7% are actively seeking employment during retirement.

Retirees are increasingly choosing to return to work for various reasons. Financial considerations play a significant role, with 48% needing to work for economic reasons. Many retirees find that their assets and pensions may not adequately support their desired lifestyle, leading them to seek additional income through part-time or full-time employment.

According to the report, only 37% of retirees with household assets under $50,000 said they don’t need to work, compared to 55% of individuals within the $50,000-to-$250,000 category and 72% with assets above $750,000.

With inflation hitting a 40-year record high and the volatility in the stock and bond markets, retirees are worried about their nest egg funding their lifestyle no matter what the retirement calculators say. Planning your retirement number and watching your essential expenses double overnight is worrisome for retirees. 

Doug Amis, CFP, says, “Retirees watching prices increase at the grocery store have decided to go back to work.”

Missing Social Interactions

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Beyond financial motives, retirees often discover that work offers a renewed sense of purpose and engagement, combating the potential boredom or restlessness that can accompany retirement. Social interaction in the workplace, as well as the opportunity to share their wealth of experience and knowledge, is another powerful motivator. 45% of retirees choose to work for social and emotional benefits instead of obsessing over when they can retire. 

Amar Shah, CFA, CPA, says, “Many of our business owners and corporate executive clients have a hard time with the traditional definition of retirement. Often, they return to some form of structured work by turning a hobby into a business, becoming an industry consultant/board member, or they take on a more meaningful role at a nonprofit. Through their working years, the business value or stock options have created significant wealth, sometimes $10M+, and many benefits of returning to work are beyond financial. These benefits include having a structure to their day, critical thinking/decision-making, social interactions, and knowing they are making an impact by doing something they enjoy. As advisors to these individuals, we also noticed that they seem happier overall.”  

Additionally, pursuing a long-neglected passion or embarking on a new career path can be a source of great personal fulfillment. The flexibility and adaptability of the modern workforce, which includes remote work and freelance opportunities, further make re-entering the job market an attractive option for retirees seeking a work-life balance tailored to their needs.

Employers Are More Flexible

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Retirees bring valuable skills and experience to the workforce, making them an asset employers increasingly recognize and appreciate. 

Employers who hire retirees often find their decades of professional commitment and strong work ethic to be invaluable assets. They appreciate the wealth of knowledge and leadership qualities that older workers bring. Companies are increasingly embracing age-diverse teams and implementing flexible work arrangements to accommodate retirees, fostering a harmonious and productive work environment.

Riley Adams, CPA, was looking to hire experienced professionals at his firm Wealth Up. He says, “Since we are a newer company, having the skill set and knowledge of experienced individuals on-demand is invaluable. We also prefer having experienced retirees willing to work for us under a freelancing arrangement. That means we don’t have to commit fully to a full-time employee at the startup phase. Still, we can also strategically leverage that experience as we need it. Plus, we feel retirees don’t want a full-time job but want to remain engaged with stimulating work part-time. As a result, it’s a perfect match for both parties.”

Challenges Faced by Retirees Joining the Workforce

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Retirees venturing back into the job market encounter a unique set of challenges. One prominent hurdle is age discrimination, with employers occasionally harboring unfounded concerns about older workers’ ability to adapt and learn. Additionally, skill gaps may emerge due to evolving industry requirements, necessitating retirees to stay updated with new technologies and trends. The fast-paced nature of technology adoption can be intimidating, but older employees can overcome this by embracing lifelong learning. 

Returning to work during retirement can impact retirees’ lifestyles in various ways. While work can provide financial stability, it may alter how retirees engage in leisure activities. Pursuing hobbies and personal interests may take a back seat to work commitments.

Retirees may also need to prepare for the stressful situations of full-time work, resulting in potential burnout. Opting for low-stress jobs can provide a balanced retirement experience that integrates the best of both worlds.

Financial Considerations for Retirees

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The financial aspect of retirees returning to work carries both opportunities and considerations. Working in retirement can provide additional income to bolster savings with continued contributions to retirement accounts such as 401(k), HSA, and IRA, potentially increasing the average net worth

However, it may require careful navigation of Social Security benefits. If you claimed Social Security early before full retirement age, benefits could be temporarily reduced based on earnings. Apart from the added income potentially pushing you into a higher tax bracket, it can also lead to additional costs for Medicare.

This underscores the importance of strategic timing to maximize these benefits. The key lies in aligning work choices with overall financial goals to ensure retirees can enjoy a secure and fulfilling retirement while thriving in the workforce.

Related article: 5 Free Retirement Calculators To Try

Future Outlook for Unretirement

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As we navigate the complexities of modern retirement, it’s clear that the landscape has shifted dramatically. High inflation and the resulting financial pressures have unexpectedly forced many retirees back into the workforce, challenging the traditional notion of retirement as a time of leisure and financial stability. This trend of “unretirement” is not just a statistical anomaly but a reflection of the broader economic challenges facing today’s society.

However, amidst these challenges lies a glimmer of hope. Efforts to stabilize the economy and manage inflation could pave the way for a future where retirees no longer find themselves compelled to work due to financial necessity. As we look forward, it’s essential to advocate for policies and support systems that uphold the dignity and choice in retirement, ensuring that returning to work is a matter of personal fulfillment rather than economic compulsion.

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