A bold new trend is emerging among older Americans: unretirement. Yes, you read that right! More and more retirees are choosing to return to the workforce, and it's not just about the money. Let's dive into this fascinating phenomenon and explore the key factors driving this unexpected shift.
The Numbers Don't Lie
According to the Bureau of Labor Statistics, nearly 40% of Americans aged 55 and older were employed in 2024, a significant increase from previous years. This trend is even more pronounced among the oldest workers, with 2.8 million men over 70 currently working in the U.S. - a quadrupling of employment rates among those aged 75 and older since 1964. Today, 19% of adults aged 65 and older are employed, a stark contrast to the mere 11% in 1987. By 2033, projections show that 1 in 4 American workers will be 55 or older, making the workforce increasingly gray.
But Here's Where It Gets Controversial...
So, what's driving this unretirement trend? Well, it's a mix of financial concerns and personal choices. Inflation has hit retirees hard, especially those on fixed incomes. Surveys reveal that a significant number of retirees are returning to work due to the rising cost of living. Recent Social Security cost-of-living adjustments have been modest, leaving many retirees struggling to keep up with expenses.
The Financial Angle
For some, unretirement is a financial necessity. Fixed incomes often don't stretch as far as they used to, and the cost of living continues to rise. Many retirees are finding themselves in a tough spot, having to make difficult decisions about whether to rejoin the workforce.
And This Is the Part Most People Miss...
However, for others, unretirement is a choice driven by satisfaction and purpose. Many older Americans are choosing to stay in the workforce because they enjoy their work and find it meaningful. They don't want to give up the sense of purpose and social connections that come with employment. Take, for example, the stories shared on Reddit's retirement community:
- "I'm a 54-year-old consultant, and I decided to focus on my business. Now, I'm busier than ever and making more than I ever did at a Fortune 100 company. It was the best decision I ever made, and I don't think I'll ever fully retire."
- "I'm a 75-year-old insurance broker, and I still work with a few select clients. I reduced my workload when I was 66, but I kept 5 very large clients who generate commissions ranging from $100,000 to over $600,000 annually. It's not about the money; these accounts are special to me."
- "I'm a 66-year-old lawyer in private practice, and I plan to continue working for a while, but only on cases I truly enjoy. A bonus is that both my kids are lawyers too, and I love seeing them at the courthouse, sharing stories, and helping them out."
Retirement: Too Quiet for Some
For some retirees, the issue is simple: too much free time. More than 40% of seniors say they're considering going back to work due to boredom. Retirement can feel empty for those who are used to structured workdays and a clear sense of purpose. Rejoining the workforce can help rebuild social connections and provide a renewed sense of purpose.
Are You Considering Unretirement?
If you're thinking of unretiring, here are some important financial considerations to keep in mind:
- Check your Social Security benefits: If you're collecting benefits before full retirement age and return to work, you could lose $1 in benefits for every $2 you earn over $23,400. However, these benefits are recalculated once you reach full retirement age.
- Consider tax implications: Working income could push you into a higher tax bracket and increase taxes on your Social Security. Consult a tax professional or financial advisor before making any decisions.
- Factor in work-related expenses: Commuting, work attire, and other job-related costs can impact your earnings. Make sure your take-home pay still makes financial sense after deducting these expenses.
- Don't forget healthcare coverage: Understand how employer health benefits interact with your Medicare coverage. You might save money, or you could complicate things unnecessarily.
- Start small: Consider part-time or contract work first to gauge how returning to work affects your finances, energy levels, and overall satisfaction.
The Bottom Line: Retirement 2.0
The traditional retirement playbook is being rewritten. Whether it's financial necessity or personal choice, millions of Americans are proving that turning 65 doesn't mean the end of working life. In a world where people are living longer and healthier lives, unretirement offers an intriguing alternative.
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About the Writer:
Kat Aoki is a seasoned finance writer with a wealth of knowledge in technology, fintech, banking, lending, and investments. Her expertise has been featured on various platforms, and she strives to empower individuals and businesses to make informed financial decisions.
Article edited by Kelly Suzan Waggoner.
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