Retirees are continually re-entering the workforce in the United States. According to a recent study by global investment management firm T. Rowe Price, around 20% of Americans have “unretired,” working full or part-time jobs, with some respondents expressing their desire to rejoin the labor market. With inflationary costs and U.S. households having to dip into their savings, returning to work provides additional income to lessen people’s fears of outliving their finances.
In general, Americans are working slightly longer than in the past. The average retirement age has ticked up to about 61, while the average retirement age among nonretirees is now 66, up from 60 in 1995, according to Gallup research. Economic uncertainty during the pandemic accelerated this retirement-reversal trend, with 1.5 million retirees re-entering the labor force by March 2022.
The recent stock market volatility has negatively impacted retirement accounts and nest eggs. Continuing to work or returning to the workforce can help recoup some of the losses. Additionally, companies offer health benefits, and as people get older, they are more apt to need health insurance coverage.
Returning to the labor market also has social and mental health benefits. Some retirees miss the social interactions and sense of purpose they get from working. After the initial joy of retirement wears off, some find they want more mental stimulation and engagement, and work provides that. With remote and dispersed teams more commonplace, unretired professionals can work from home flexibly, making returning easier.
Financial And Social Incentives
“Many retirees either choose to work or need to have work be part of their retirement lifestyle,” said Judith Ward, CFP®, the vice president and thought leadership director at T. Rowe Price. “This decision can have many powerful positive effects, not least of which is financial well-being.”
Nearly half (48%) of the respondents who were unretired felt they needed to work for financial reasons. In a May 2023 financial wellness Bankrate survey, 52% of U.S. adults said money has a negative impact on their mental health, up significantly from 42% a year ago. In a separate Bankrate study, about 40% of respondents blamed insufficient retirement funds and emergency funds as factors keeping them from feeling financially secure.
A similar portion (45%) in the T. Rowe Price poll re-entered the workforce for its interpersonal and emotional benefits.
Overall, 57% of retirees desire to continue working in some capacity, while 43% say they would stop working altogether.
Other Motivations
The survey data shows that the respondents who came out of retirement to work full time are most often motivated by the desire for mental stimulation and the professional fulfillment they derive from their work. Moreover, the former retirees enjoy working on their terms rather than out of sheer necessity.
The research reveals that motivations also vary along gender and marital lines. Women and single retirees are more likely than men or married couples to attribute “income” as their primary motivator for unretiring. Many single people also found work to be a good use of time in retirement. Men were more apt to cite “social connections” as an incentive to work.
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