The Decision to Unretire

Americans have always unretired. In fact, after dipping to 2% during the COVID crisis, the percentage of retirees re-entering the workforce has returned to its pre-pandemic level.

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    The Decision to Unretire

    The Decision to Unretire

    The decision to unretire is not new for Americans. In fact, after dipping to 2% during the COVID crisis, the percentage of retirees re-entering the workforce has returned to its pre-pandemic level, rising to 3.2%.1

    This rate of re-entry into the labor market may go higher still, thanks to a tight job market, lower pandemic fears and high inflation. Making the decision to go back to work involves weighing a combination of factors that are unique to each individual. Yet, there are some general considerations that most retirees may want to keep in mind.

    Benefits of Unretiring

    There are a many good reasons for going back to work, including:

    • Extra income, which has become more compelling in these high inflationary times
    • Potentially higher Social Security benefit payments by allowing you to delay taking Social Security; employment may help you delay commencing reduced payments prior to full retirement age or afford you the opportunity to delay benefits past full retirement age to earn higher lifelong benefit payments
    • Social interaction, which may address the isolation and boredom that can accompany retirement
    • Greater intellectual engagement, which can keep you mentally sharper and reduce the chances of dementia
    • Higher work satisfaction, which comes from returning to work on your terms and the personal fulfillment that comes with mentoring younger workers
    • Living a longer, healthier life, which is a by-product of the social and intellectual benefits of being engaged

    Impact of Unretiring

    Before making the leap back into the workforce, you may want to consider the reasons you retired. For instance, were you tired of the grind? The egos? The meetings? Maybe you liked the work, but just not all the corporate nonsense that goes with it.

    If that’s the case, you need to find a situation that will be free of the things you most grew tired of. Perhaps, that can be realized through a freelance or consultant type of role. Another alternative to consider is taking on an entirely different role that involves a personal passion.

    There are also tax and retirement implications to returning to work. For example, post-retirement income can move retirees into a higher marginal tax bracket, as well as affect their Social Security benefits. In both cases, any impact will diminish the financial benefit of unretiring. You should speak to your tax advisor to learn what tax impact there may be for you.

    Finally, if you are one of the lucky ones to have a pension benefit, you may want to contact your pension provider about any potential impact of returning to work.

    It’s beneficial to consider all angles in making such an important decision.  If added income is needed, it might serve well to talk to your financial advisor about funding retirement through a reverse mortgage.  If it’s not funding that’s the issue, but rather social interaction and a feeling of uselessness, then volunteering in retirement might satisfy a retirees needs.



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