For many older Americans, retirement is the end of the road. You work and then you retire and that’s it. But there is a growing trend called “unretirement,” where people retire and then at some point, return to the workforce.
The reasons retirees return to the workforce vary, but for many, it isn’t about the money. Some cite that as a reason, but for a lot of unretirees, they go back to work to find a sense or purpose – or because they felt like they retired too early and they are bored or untethered.
That said, they are generally not returning to their old career. Many people who choose unretirement ago into a different field, start a side gig or pick something altogether different, like pursue a hobby, passion or something fun.
There are some benefits to unretirement, and certainly finding a sense of purpose and a social network are two main ones. For some retirees, they find they are bored, lonely and the allure of the tennis court, golf course or other social pursuits isn’t what they hoped.
Money does play a role, for sure, but for some seniors who choose to unretire, it’s best to talk to a financial professional so as to not harm current benefits or retirement income.
For some seniors, going back to work could impact Social Security benefits, meaning you could have a lower – or higher – check each month. For those born 1943 or later, each year you defer Social Security benefits after what’s considered full retirement age (66 or 67 generally), you can get increased monthly checks. And if you were already getting your benefits and you go back to work, you might lose some of your benefits – depending on your age.
Check out the Retirement Earnings Test Calculator on the Social Security Administration website for more information.
Unretiring might also impact Medicare. If your new job offers health care that could be considered primary coverage, you can drop Medicare – and reenroll later with no penalty. However, don’t drop Medicare if you don’t have an employer health plan or you might be charged a penalty to reenroll.
And finally, know that a return to work could impact your pension and 401(k) plan.
For the most part, you will still be able to collect your pension if you go back to work for a different employer.
And you might be able to keep contributing to your 401(k) – or any tax-deferred retirement account, depending on several factors (like your age).
Do you still have questions about retirement planning options?
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If you have other questions about retirement plan loans,email us or call 937.308.0758.
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