An astonishing number of retirees reverse retirement — quit their lives of leisure and go back to work either part or full time. Is retirement really not all that it is cracked up to be?
Going backwards is rarely a good idea, but reversing back into a compelling job can actually have far reaching benefits. Find out more about this surprising reverse retirement trend.
One Third of Retirees Reverse Retirement
According to a Federal Reserve Board study, a full 1/3 of those who retire eventually reverse retirement and return to work on either a full or part time basis.
The exact percentages of people that are finding work after retirement depends on income levels. The highest reverse retirement rates are in both the highest and the lowest income groups.
- Nearly 35% of the lowest group reverse their retirement. Same for the highest tier.
- Almost 30% in the second tier and fourth tiers go back to work.
- 32% in the middle tier.
Even the Department of Labor has noticed the increase in the labor-force participation rates by those 65 and older. In 1985 only 10.8% of those over 65 were working. That number has nearly doubled and currently stands at 19.6% and growing.
Over the entire 2014–24 decade, the labor force growth rate of the 65- to 74-year-old age group is expected to be about 55%, and the labor force growth rate of the 75-and-older age group is expected to be about 86%, compared with a 5% increase for the labor force as a whole.
Why Are So Many People Returning to the Daily Grind?
According to the Federal Reserve study, “We suspect that they [retirees] either do not think of retirement as the state of no longer working or they find that, unexpectedly, they do not like not working and would rather return to work.”
The study looked at many factors that may contribute to a return to work including why they stopped working initially and whether or not they reported “liking” retirement.
It appears that many people who return to work after retirement just needed to get over some degree of burnout from the job. However, the study found that the motivation to work after retirement may depend on income levels:
- People in the lowest income percentile usually return to work because their need for more income.
- People in the highest income percentile might not need the income, but it seems that they want to take advantage of their skills and the opportunity to make money.
Torsten Slok, chief international economist at Deutsche Bank Securities suggests about the highest income percentile, “They have money-making skills, networks and qualifications, and one day they get a call asking them to work in a job that might be less stressful than the one they had. Also, life spans are getting longer, and people don’t want to spend decades just playing golf without being more fully engaged.”
6 Tips for Finding Work After Retirement
No matter your motivation for a reverse retirement, here are a few tips for finding a retirement job:
1. Prioritize Goals: The job market remains fairly tight and you may not be able to find a position that gives you everything you are looking for. So, you should think about what is really important: flexibility, salary level, the type of work, benefits package, the number of hours, specific perks or other.
You’ll want to decide whether you are seeking work to pursue a passion, because you need the income or maybe you just want somewhere stimulating to go each day.
Knowing what you are after and why will really help you be satisfied with your work.
2. Consider Adjusting Salary Expectations: Depending on the type of work you want to find, you may need to adjust salary expectations. The Government Accountability Office (GAO) found that older workers sometimes do not take jobs because their expectations are out of line with the current pay scales.
This can be particularly tough if you had been working for a long time and had built up your earning potential.
3. Be Ready to Get Along With All Types: It seems to be human nature to want to work with people who are like you. But to keep working, you may need to be comfortable rubbing elbows with people from different generations and make them comfortable with you.
4. Use Technology: Whether it is applying for a job via the web, email or a tweet — or actually being able to operate the computer software you might need for your desired career — technology and changes in technology can be completely overwhelming.
The good news is that if you can adapt to these new systems you are guaranteed to keep your brain in top working order. Learning new ways of doing things is arguably the best way to keep your brain young.
5. Work for Yourself: BLS data shows that workers in older age groups have higher rates of self employment than younger cohorts. You can use your hard earned expertise to become a consultant. Or, you might want to mix it up and join the gig economy. Technology has enabled a widening range of options: walk dogs (Rover), sell homemade crafts (Etsy) or drive your car (Uber).
6. Figure Out How a Retirement Job Impacts Your Financial Plan: Creating and maintaining a retirement plan is critical to your financial well being — whether you are working and delaying your retirement or already completely retired.
And, from a financial perspective, a detailed and completely personalized retirement plan is also the best way to figure out how long you should work.
Do you know what your financial needs are? Now? Twenty years from now? The NewRetirement retirement planning calculator is an easy to use but highly detailed resource that lets you create your own retirement plan and keep it updated. You can input different income and expense levels for various time periods.
See how your continuing or returning to work impacts your retirement plan
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