Unretirement: Making the Most of When You Return to Work in Retirement

Everyone might plan on calling it quits with their work at some point. But what about “unretiring” and going back to work again after leaving the workforce?

Well, you have probably heard of some of the more glamorous instances of unretirement: Tom Brady’s comeback. That cringe-worthy commercial featuring NFL legends Dan Marino, Emmitt Smith, Randy Moss, and Jerry Rice. Even in the entertainment world, where long-time actors like Cameron Diaz are returning to the big screen and other acting work.

Of course, unretirement isn’t just for sports stars and celebrities trying to extend their glory days. In the real world, it’s a growing trend where, for various reasons, people find themselves back in the workforce after saying farewell to the daily grind. Sometimes unretirement is a freely made choice. In other cases, it’s forced or necessary.

Do you find yourself thinking about unretiring? In this article, we will dive into why some people are dragged into it while others choose to unretire for a second-act career, financial necessity, or drive to start a business. If you happen to find yourself in a situation of unretirement, there are steps that you can take to put your best foot forward. We will also talk about what those options can look like.

What Is Unretirement?

In a nutshell, unretirement is when someone leaves retirement and, for whatever reason, goes back to work. While people’s motives for heading back to work vary greatly, the number of people unretiring has been going up since the pandemic.

T. Rowe Price released a report which found that about seven percent of retirees are looking for work opportunities in retirement. Meanwhile, 20% of retirees say they are already working full-time or part-time. According to Judith Ward, CFP and thought leadership director at T. Rowe Price, that number sat at 10% in 2021. In other words, the percentage of working retirees doubled. Many people had been forced into retirement and then re-entered the workforce a few years later.

In the T. Rowe Price report, nearly half (48%) of working retirees felt they needed to work for financial reasons. Another similar group (45%) said that they were doing so for social and emotional benefit.

Now, what are some hard, real-world reasons that people might unretire?

Unretiring by Necessity

Going back to work in retirement isn’t always a choice made with a smile and a confident stride. As research shows, unexpected events force many folks into unretirement. Whether it’s a financial setback, unexpected healthcare expenses, or a shaky investment, life has a funny way of throwing curveballs.

In recent years, many people were forced into early retirement due to company downsizing, changing work situations during the pandemic, or health reasons. This may have caused them to think that they were done working – and then the prospect of unretiring due to financial hardship could be draining. Still, having bills to pay drove them back to the office.

Unretirement Prompted by a Financial Setback

Picture this. You have saved diligently, planned for your retirement years, and then the unexpected happens. The market has some bad years, an economic downturn hits, or you just have some financially hard times.

If you are in the early years of retirement – or those crucial years just before retiring – a financial setback can hurt more than usual. This period is what financial professionals call the “retirement risk zone.” Investment losses in this span are costly, as you just don’t have the time for financial recovery as you did in your working years. Should you be taking out money from your retirement accounts for income, those losses are even greater.

Because investment losses in the retirement risk zone are ill-timed, the financial industry refers to this scenario as “sequence of returns risk.” Sequence of returns is a big reason for why people should explore ways to protect their nest egg as they enter the final stretch just before retirement. Otherwise, ill-timed losses can take quite a toll.

Medical Bills and the Uninvited Return to Work

Health is wealth, they say, but what if your health changes right after you retire? Unexpected medical bills can turn a comfortable retirement into a financial mess. And as many people can attest, the cost of healthcare has been rising over the past several years.

If you find yourself in a situation where your insurance coverage isn’t quite enough, you may have to pay some out of pocket. That may prompt an unwelcome return to the workforce, even if you had planned well for a comfortable retirement.

The Second-Act Career – Unretiring on Your Own Terms

Not all unretirements are born out of necessity. Sometimes people choose to make a comeback because they crave a second-act career. They miss the social connection that they had in their work community. They want the thrill of being in business for themselves. Or they simply want to show the world that retirement doesn’t mean they are ready for the rocking chair yet.

You might pursue consulting in your field with your knowledge and expertise. You may wish to start a company that you have long desired to launch. Perhaps the prospect of making money again excites you.

Either way, unretirement is on your terms, and as they say, the world is your oyster. You can carve out your own path, work on a schedule that is right for you, and enjoy this time as you see fit. It’s all part of the many ways in which people are redefining retirement from what it was for prior generations.

Is Unretirement Right for You?

You might not be at the point of feeling financially strapped, but maybe the thought of going back to work has some appeal. The question is whether you will enjoy or regret the decision to unretire after committing to it.

If you are thinking about taking this big step, here are a few situations in which it could make sense:

  1. You need the money to pay your monthly bills, especially if you have already trimmed some expenses. Look at your budget, income sources, and see if it makes sense.
  2. You want to be more fulfilled and have more purpose than what you are currently getting from your retirement lifestyle.
  3. You aren’t quite eligible yet for retirement benefits such as Social Security.
  4. You long for the community and social connection that you had while you were working.
  5. The cost of living is rising, and supplementing your current retirement income streams will help. If you are receiving Social Security, look at the effects of returning to work on your benefits and what any tax implications may be.
  6. Health expenses are high, so going back to work makes sense as you will have workplace health benefits. You may have options for this.
  7. You want to stay active so that you remain in good shape and have a great health outlook.
  8. You had an early exit from the workforce, but want to delay taking Social Security and maintain an income bridge until the day that you claim your benefits.
  9. You want to keep your mind sharp and focused.
  10. You have always wanted to own a business, and you will start a company that you have long planned for.
  11. You would like to ease into the possibility of working again, and part-time work makes sense, as you don’t want to jump in with both feet yet.
  12. Getting into a new line of work excites you and gives you new passion for your retirement years.

The motives for unretirement won’t be the same for everyone, and this list above isn’t exhaustive. The bottom line is that your decision to unretire needs to make sense for you.

If you are freely considering a return to work, you might also test-drive a work opportunity on a part-time basis. That can give you an idea of what your day-to-day schedule and other important matters will be prior to you making any full commitment.

What If Unretirement Is Forced?

As we covered before, you might be in a situation in which unretirement is just necessary. If you have been out of the workforce for some time, you may wonder about how to make the adjustment and shore up any gaps.

First of all, hopefully people in this situation will have a long-term financial plan. It’s time to audit your current financial situation and see how returning to work will change things.

Go home, log onto your computer, and pull up your plan. What does your spending in retirement look like at the present? How much income are you generating from different sources? Where is the money coming from?

How much additional income will working bring you? Will you be bumped into a new federal and state income tax bracket? Will it affect your Medicare coverage in any way? Can you afford to stop taking money from one of your income sources, if your work earnings will cover it? How long do you need to work before you can come back to your preferred retirement lifestyle?

Your financial plan will help you sort out these questions and more. If your current money sources aren’t paying you predictable income each month – you know what you are getting from Social Security, for example – maybe consider some money moves that will bring you some reliable income streams. You might explore annuities, bond ladders, or other strategies that can give you more financial confidence about your income, for example.

If you need to make any changes to your retirement plan, talk to an experienced and retirement-knowledgeable financial professional. They can help you work through different scenarios and see what you can do to reach a better position of security and peace of mind.

They can also help you envision how long you might need to work, and when a return to your previous lifestyle may be possible. Ask about the pros and cons of different situations, and you can make confident, well-informed decisions with that information in mind.

The Bottom Line on Unretirement

Unretirement may have a cool factor in some respects, with athletes making comebacks and actors reappearing in Hollywood blockbusters. But the real stories of unretirement are far more diverse and, at times, they are less glamorous. From financial setbacks and unexpected life changes to pursuing second-act careers and entrepreneurial dreams, the motives behind unretirement are as widely varying as the people unretiring themselves.

So, the next time that you hear about someone unretiring – or the prospect of unretiring comes up for you – don’t think of it as only a return to the 9-5 grind. It can be a second chance at a new passion, an opportunity to reinvent oneself, or a chance to maximize self-potential. Retirees are redefining what retirement looks like, and they are boldly taking life by the horns.

Whether you face unretirement out of necessity or free choice, it’s not just a trend. It’s a testament to your personal resilience and self-potential that you might have not otherwise been able to unlock. Retirement isn’t an end, but a journey.

If you do find yourself in a situation of forced unretirement, then talk to your financial professional and see what your options are. You might dig up opportunities that you might not have thought were there otherwise.

Are you looking for a financial professional to help you through the possibility of unretiring – and perhaps your retirement years in general? If you are ready for personal help, many independent financial professionals are available here at SafeMoney.com.

Get started by visiting our “Find a Financial Professional” section, where you can connect with someone directly. You can request an appointment to discuss your goals, concerns, and explore a potential working relationship. Should you need a personal referral, please call us at 877.476.9723.


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