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Why People Return To Work After Retiring

For all the talk about raising the retirement age, the debate may be moot. A recent study by Paychex revealed, “1 in 6 retirees are considering returning to work.” It’s also interesting to note that 53% of those thinking of going back to work wanted to work remotely.

No matter how you slice it, people of traditional retirement age don’t want to stop working. Does this sound strange? Isn’t the whole point of retirement to sit back, relax, and enjoy your life?

Should you go back to work when you’re retired?

And if so many retirees are going back to work, wouldn’t it be natural for you to consider doing the same? If you step back and think about the possibilities, it may surprise you to discover that you have lots to benefit from working, even if it’s a part-time post-retirement gig.

“It could be very beneficial for certain people to go back to work after retiring,” says Bob Chitrathorn, CFO
and vice president of Wealth Planning at Simplified Wealth Management in Corona, California. “If at Full Retirement Age, they can collect Social Security and still work without worrying about a deduction in Social Security if they make too much. It’s also great for those that love what they may be doing. It gives them something to do and makes money vs. spending free time spending money.”

Why do retired people go back to work?

There are many reasons to return to the labor force during your retirement years. Do any of these ring a bell with you?

Robert Reilly, a member of the finance faculty at the Providence College School of Business and a financial advisor at PRW Wealth Management in Boston, says, “The decision to go back to work mainly depends on three items:

  1. Do you want to?
  2. Is there a meaningful second career that you’ll enjoy?
  3. Do you have to make ends meet?”

Retirees face many challenges, but…

Is it worth going back to work after retirement?

Of course, there are trade-offs if you return to work after retirement. You’ll need to assess what the impact of continuing to work will have on you, your family, and your plans.

“When we update a financial plan, we can easily model the impact of continued income during retirement,” says Emily C. Rassam, senior financial planner at Archer Investment Management in Charlotte, North Carolina. “If it’s not required, we urge our clients to think about the quality of life and whether the work would be enjoyable.”

To determine the value of working while retired, you need to have a good grasp on your lifetime goals. It makes no sense to get a retirement job if it doesn’t move you closer to your greatest desires.

“Going back to work after retiring depends on the situation,” says Anna Rappaport, member and volunteer of the Society of Actuaries in Chicago. “Very often, some people work for money and/or health benefits. Some work for the money to travel and/or do things they are interested in, such as hobbies. Other people work because they feel valuable doing the work, and it gives them a sense of purpose. Or, a retiree might work due to any combination of the above.”

Once you decide to move ahead, you’ll want to determine where to work. Be careful, though. According to the Paychex survey, 74% of working retirees “feel judged by co-workers because of their age,” and 62% of the people who do the hiring “are skeptical about hiring retirees.”

There’s no reason to put yourself in a position that increases stress if you have the choice. In fact, try to be daring. There are plenty of opportunities out there.

“Any type of work in retirement is valuable,” says Chris Kampitsis, a financial planner at The SKG Team at Barnum Financial Group in Elmsford, New York. “Part-time work, consulting work, etc., allows you to spend more time doing things besides spending and lowers the amount needed to withdraw from your nest egg annually. It can also potentially provide benefits depending on the arrangement—whether it is a 401(k) match or supplemental health care.”

There’s another thing to consider. Just because you’ve returned to work after you’ve retired doesn’t mean you have to stay working. It may be that your post-retirement job represents a transitional phase from full-time employment to full-time retirement.

“Many people return to work after retiring to regain that sense of purpose,” says Lawrence Sprung, founder of Mitlin Financial in Hauppauge, New York. “It is not easy working for 30 or 40 plus years and suddenly having that part of your life stop.”

The critical aspect of working after you’ve reached retirement age is to see how it affects your mental, physical, and fiscal well-being. Is work a form of healthy exercise? Is it a form of easy additional income? Or does it add to your anxiety at a time when you’d rather not have that pressure?

“It can be worth going back to work after retirement, depending on the individual’s circumstances,” says Derek Miser, investment advisor and CEO at Miser Wealth Partners in Knoxville, Tennessee. “For some people, returning to work can be a way to stay physically and mentally active and to stay connected with the working world. It may also be a way to supplement pension income, if necessary. However, it is important to consider the potential stress and physical strain that returning to work can bring and to make sure that it is a decision that is right for the individual.”

What will you decide?

Working in retirement is a choice that isn’t written in stone. If you don’t like the gig you opted for, quit it and pick another one. It’s not like you care about how quitting might hurt your ability to get a promotion. You’re past that point in your career. You’re working on your time, not their time.

“Returning to work happens all the time, and I support it if it makes sense for someone,” says Clint McCalla, senior wealth manager at LourdMurray in San Diego. “When does it make sense? If retirees need the funds to support their lifestyle or they miss the sense of fulfillment, go for it. You don’t have to go back into a career. Try to find something you enjoy.”

Finally, don’t rule out building your own side hustle. It may offer the best of both worlds for you. Imagine doing something you love, something you’ve always dreamed of doing, and then getting paid for it!

“Whether or not it is worth going back to work after retirement depends on the individual’s financial situation and personal goals,” says Dennis Shirshikov, the Head of Growth for in New York City and a professor at the City University of New York where he teaches finance, economics, and accounting. “Some retirees choose to work part-time or start their own business as a way to supplement their income and stay active and engaged.”

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