Explore the rise of "unretirement" and learn about its potential benefits and challenges, as well as the considerations needed before making the decision to rejoin the workforce.
According to a recent report by T. Rowe Price, the COVID-19 pandemic created 2.4 million "excess" retirements in 2020. Some folks retired due to family health issues. Others retired from high-stress positions in health care or education. And many were forced into retirement due to cutbacks by their employers.
Fast-forward to 2022 and more than half of those COVID retirees were back in the workforce. 20% of retirees in another T. Rowe Price study are either working full time or part time. An additional 7% are actively looking for some level of employment.
If you think unretirement could improve your Return on Life, work through these three questions and share your answers with loved ones and your financial advisor.
A successful transition back to the workplace after retirement, often referred to as "unretirement," requires a compelling reason, a "Why" that is more substantive than merely "I retired earlier than I desired."
After spending a few years experiencing the life of a retiree, it's quite likely that your initial perspective on retirement has undergone some changes. You've had a first-hand experience of what your weeks are like without the constant demands and structure of your old job. Perhaps you've relished the newfound freedom and flexibility that retirement has given you. However, it's also possible that the absence of a structured routine has left you feeling restless and disoriented.
Retiring earlier than planned may have also precipitated certain aspects of your financial plan ahead of time. It might be that your nest egg, your savings meant to sustain your post-retirement life, needs to be replenished or "topped off." Alternatively, you might be considering getting back to work in order to earn some additional income. This extra income could enable you to postpone claiming your Social Security until your full retirement age or even until you turn 70, allowing you to maximize your benefits. It could also be that you were compelled to retire before reaching the age of 65 and now need to work to bridge the gap until you're eligible for Medicare.
On the other hand, it could simply be a case of feeling unfulfilled and without a clear purpose since you stopped working. The lack of professional challenges and the absence of a meaningful role could leave you feeling bored and unsatisfied.
Alternatives to rejoining the workforce full time offer a variety of opportunities for retirees.
Part-time positions or volunteer work can provide a sense of purpose and structure, without the commitment and stress of a full-time job. These roles could be in smaller companies or non-profits, aligning work with personal interests or causes you're passionate about.
Another alternative is mentoring the next generation of professionals. This can allow retirees to pass on their wealth of knowledge and experience, while still feeling connected to their professional field.
Teaching or consulting part-time can also be a great way to stay engaged and utilize your professional skills in a less demanding setting.
For those who are more academically inclined, taking online classes or pursuing a degree could be an opportunity to explore a niche in your old profession more thoroughly. This could even lead to a second career or starting your own company.
Beyond the professional realm, retirees should consider how to fill their time with enjoyable activities. This could be anything from sports, arts, home remodeling projects, to vacations and dining out.
Furthermore, retirement can be a great time to try new things and embark on new adventures. This could be travelling to new places, picking up a new hobby, or even starting a community project.
Spending more time with family and friends is another crucial aspect. Retirement offers the flexibility to visit loved ones, attend family events, or simply enjoy quality time with those close to you.
Ultimately, the goal is to find satisfaction and fulfillment in retirement, without the necessity of rejoining the workforce full time.
If you haven’t tried some of these or many things in your short retirement stage so far would encourage you to do so before making the jump back to a full working life. Revisit the reason why you retired in the first place as well can be a worthwhile exercise and a reminder to yourself that it can take some time to find your place in this next stage.
On the other hand, if the thought of retiring and settling down doesn't seem as exciting or fulfilling as the constant energy and engagement of your previous work week, you need to start preparing and planning for how this "unretirement" phase is going to impact your overall financial plan.
Health care considerations, Social Security benefits, and your investment and withdrawal strategies are just a few of the many important aspects that will need to be thoroughly examined and re-evaluated. These are complex issues that will require the guidance of a skilled financial advisor.
It's not just about the numbers, but about how these components fit into your life plan and support your goals and aspirations. You should, therefore, schedule an appointment with your financial advisor at your earliest convenience. During this meeting, you can expect a comprehensive review of your financial situation and a discussion about the potential implications of your unretirement.
This way, you can transition into this new phase of your life with confidence and a solid plan, ensuring that you are financially secure and prepared for the future.
It's also crucial to remember that returning to work doesn't have to mean returning to your old job or even your old field. Unretirement offers a unique opportunity to pursue new interests and passions that may not have been feasible during your previous career. Consider exploring fields that you've always been interested in or turning a longtime hobby into a career. This could bring a new level of fulfillment and excitement to your work.
In addition, consider the social aspect of returning to work. Many retirees miss the daily interactions and camaraderie that come with a workplace environment. Working, whether part- or full-time, can offer valuable social connections and a sense of community.
Lastly, it's important to balance work with leisure. Make sure to leave time for relaxation and activities you enjoy. After all, unretirement doesn't mean you can't still enjoy the perks of retired life.