- August 14, 2023
- Retirement, Retirement Planning
Retirement. Many have visions of what retirement looks like: travel, spending time with friends and family, or picking up new hobbies. You clock out that final time, celebrate and then retirement happens. You might jump for joy, donate all your suits, and never look back.
However, many retirees might begin questioning whether retiring was the right decision for them. Whether due to financial pressures, lack of interest in the retirement lifestyle, or just missing the daily grind of the 8-5 routine, many retirees are going back to work and “unretiring.” According to data from Paychex, about 1 in 5 of retirees are considering returning to the workforce.
During the pandemic, America experienced the Great Resignation. “Even the spike in retirements during the peak-Covid Great Resignation now looks more like a Great Sabbatical, a blip in the long-term trend data, with a higher percentage of retirees reentering the workforce than in February 2019,” the report said. Many retired waiting for better jobs with better pay, jobs with more flexibility, or jobs that allow more control of their time.
According to a report from the U.S. Senate Special Committee on Aging, the share of the workforce aged 55 or older almost doubled in the past two decades. By 2028, over a quarter of the workforce will be aged 55 or older. The report identifies that older Americans are increasingly turning to the gig economy to supplement their incomes and savings due to the flexibility it provides. Nearly 1 in 3 independent or “gig” workers are over age 55.
If you are considering a return to work after retiring, evaluate your current tax situation and how additional income might change your tax brackets or Social Security benefits. Part-time work may be a good alternative to full-time employment. You can get some much-needed routine and a paycheck, but the impact on your total income may not have the same effect on your other retirement benefits or tax bracket.
Thinking about unretiring? Make sure to have a conversation with your financial advisor. They can help you come up with a strategy to help maximize your retirement benefits, minimize the impact on your income taxes, and guide you to find the right kind of employment for your unretirement.