Connecticut Estate Planning Attorneys Blog
In 2020 – as COVID-19 wreaked havoc on the economy and our very way of life – 2.4 million people who weren’t originally planning on it decided to retire. Two years later, in March 2022, more than half of those folks (1.5 million) had returned to work.
This “unretiring” trend was the topic of research conducted by T. Rowe Price. Their survey-based Retirement Saving & Spending Study included the following highlights:
- 20% of retirees are working either full-time or part-time.
- 7% of respondents report looking for employment.
- Roughly half (48%) of those working in retirement felt they needed to work for financial reasons, while a similar portion (45%) chose to work for social and emotional benefits.
The group surveyed cited a variety of reasons for returning to work, but for some, a lack of retirement planning was the driving factor. Some people retired during the pandemic only to discover that they weren’t as prepared as they’d thought for getting by without a work-based income.
Others made the strategic decision to go back to work in order to delay retirement account withdrawals. As T. Rowe Price details in the summary of their study, the longer a person delays claiming benefits (up until age 70), the higher the monthly benefits.
Benefits increase by 8% for each year past an individual’s FRA (full retirement age). In a hypothetical example, T. Rowe Price calculates that the annual social security payment for a person would increase from $19,920 to $39,780 if the individual held off on claiming benefits until age 70 instead of claiming them at age 62.
Some people opting to unretire did so for the social and emotional benefits. They were happy to have some routine and structure back in their lives, as well as the opportunity to challenge themselves and engage with other people.
The Many Benefits of Unretiring
Although traditional retirement has long been a staple of the American dream, many of today’s seniors are realizing that they aren’t ready to step completely away from their professions.
The good news is that there are many benefits to rejoining the workforce, even if only in a limited capacity. Here are just a few of those benefits:
- Higher Social Security Payments — As noted above, delaying claims on Social Security benefits increases the amount of the annual payment, which can be very helpful in later years when working is no longer of interest nor an option.
- The Comfort of Extra Income — This may go without saying, but it’s always nice to have a little extra cash on hand. According to the T. Rowe Price study, this benefit was particularly attractive to women, single retirees, and individuals with household assets under $50,000.
- A More Active and Engaged Life — At any age, work helps people feel a sense of purpose. It gives them a reason to get up in the morning, and makes them feel like they are contributing to society. Even if money isn’t an issue, many unretired folks appreciate the opportunity to avoid boredom at home, use their skills, and learn new things.
- Better Health and Energy — Since many of today’s unretirees are crafting jobs and careers that they love, it’s no surprise that engaging in this work has a positive effect on people’s health. Excitement about the day ahead boosts energy and optimism. And the structure of having a regular work routine can help support healthy habits — like eating well, exercising, and getting good sleep —that might otherwise slide.
- Important Social and Emotional Connections — Many people struggle when they retire because giving up their work life means giving up a big part of their social life as well. But working even part-time can help create new connections and relationships that play a critical role in supporting well-being and emotional stability.
How to Unretire Successfully
If you’re thinking about heading back to work, it’s important to know that there is no one-size-fits-all plan for a successful unretirement.
There are, however, some basic steps that can help you build a strong plan and make good decisions:
- Take time to think about what you really need, and what you really want. Remember that “going back to work” doesn’t mean returning to what you did before retirement. Think of this as a clean slate — an opportunity to reimagine who you are and what you do. Think about what type of industry and organizations interest you most, what role you’d like to play, how many hours you’d like to work, whether you prefer in person or remote situations, etc.
- Be creative and resourceful in your job search. Unfortunately, ageism is alive and well in many traditional hiring channels, so you may need to think a little outside of the box. For instance, the best place to start looking may be through your personal network, including friends, family, and past colleagues. You might be surprised to find that there are only a few degrees of separation between you and your dream job. You might also, if you have the means, consider hiring a career coach. There are many such professionals who specialize in placing older folks in new careers.
- Consider building on your existing expertise. You don’t have to reinvent yourself to unretire. Many people who loved what they did before they retired are happy to step back into that world. You may not want to resume exactly where you left off, but look for opportunities to consult or mentor. It can be really fulfilling to help up-and-coming professionals succeed in territory you already conquered.
- Do your due diligence with smart planning. There are financial consequences to returning to work, so it’s important to review your finances, understand how additional income will affect things like Social Security benefits and retirement savings, and generally plan ahead.
- Freshen up on relevant technology. Depending on the type of work you want to do, you may want to take some time to explore the apps, online resources, and other tools that might come into play.
- Be open to starting your own business. Unretiring doesn’t have to mean going back to work for someone else. You might decide to open your own business or start your own freelance practice. Think about the interests and activities that get you most excited, and then explore how you might turn those into a profitable venture.
Embarking on a New Unretirement Adventure
When young people graduate from high school and college, we encourage them to dream big and get excited for the adventures ahead. We tell them what an amazing privilege it is to have a chance to explore the world and find their place in it.
Now, many older people are having a similar experience much later in life as they embark on new unretirement adventures of their own.
In many cases, unretirees are writing their own ticket by creating customized careers that are a good match for their needs and lifestyle. This might mean working part-time, joining the gig economy, launching an entrepreneurial venture, or pivoting to consulting and mentoring. For those with strong professional experience and a little imagination, the sky’s the limit.
If you’re setting out to build your new best life, good luck and enjoy the journey!
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Finding Employment After 50: 10 Tips to Get the Job You Want
Positive Aging: Why It Matters and Where to Start
