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Do You Plan to Un-Retire?

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Are you longing for the days when you can retire, or have you already retired?  The reality may not be as rosy as we’ve been conditioned to think.  What was once viewed as a milestone and a crowning glory to all your workforce years, followed by a period of rest, is being challenged by current life expectancy, financial, and economic factors which are driving people to keep working well into their seventies.

This movement is now dubbed “unretirement.”  In America, 1 in 3 adults plan to continue working during the traditional retirement years in order to prepare financially for longer life expectancies (1).  The Social Security Administration has estimated that if you live to the age of 65, at least 1 in 7 will go on to live past 95.  The rise in life expectancy is a testament to the advances in modern medicine and living standards; but living longer means needing more financial security, for longer.

In the past, people working through their retirement may have decided to work to keep their minds active (a sentiment still shared with 62% of people surveyed) and to generate income (as 53% of people surveyed still cite as a motivating factor in 2019).  The “unretirees” name reducing expenses overall by continuing to generate income as their chief reason for working, followed by securing life insurance, maximizing contributions to retirement accounts, and focusing on higher risk/higher return investments, among others.  Twenty-seven percent of people surveyed who are trying to plan for a longer life span received or are receiving guidance from a financial advisor about how they should plan for the next portion of their lives (1).

Currently, over half the polled adults aged 70-79 plan to work in a paid position—but they do plan on taking on less hours.  Those working in the 70-79 year old bracket project that they will work at least 10 hours per week, and adults aged 40-59 plan to work at least 20 hours per week.  Adults between ages 40-59 believe they will work in retirement, even if there is no financial indication to do so (1).

Why are more people deciding to work into their retirement years?  While the reasons of social interaction, keeping active, preventing feelings of depression and uselessness are still very prevalent motivations, there is another reason people want to keep working—the notion of mini-retirement breaks. 

The mini-retirement break is the philosophy that instead of working until a certain age and then entering a long period of unemployment, there are intermittent year-long breaks from working.  This results in working longer periods throughout one’s life, and 61% of adults aged 40-49 believe this mentality is the key to their future happiness.  The amount of people in agreement with the idea of mini-retirement breaks decrease about 10% per age group decade, but this idea of a retirement break has appeal to all ages of workers (even 47% of those 70-79).  But how feasible is it?

The unretirees plan to focus on staying in the same field or similar industry, but 40% of unretirees had to, or plan to, branch out into a different field.  They acknowledge that over two-thirds of the time “It’s hard to find opportunities for work in retirement that leverage [their] expertise or experience.” They also feel the threat of “aging out of” their industries; but they still remain optimistic and up for the challenge.  Many of the unretirees surveyed (27%) plan to use their unretirement as a means to pursue a new passion.  These new careers are called “encore careers,” and over three-quarters of unretirees believe that learning a new career is the antidote to senior depression (1).

Individuals nearest the traditional retirement age reflect the biggest group considering going back to work at least part-time or having goals of starting their own business after retiring.  Less than a quarter of adults from 40-79 are considering going back to work full-time after retirement; and yet, 40% of adults in the years before the traditional retirement age can imagine working until the end of their lives.  After the traditional retirement age and beyond, this percentage is halved by people who don’t want to imagine working until the end of their lives.

It seems that as retirement age approaches, people are optimistic about the chance to find an encore career or continue working in their field—but once at, or beyond, the classic retirement age, it’s clear they don’t want to work forever.  Perhaps it’s not as easy to recondition ourselves to working in our golden years as previously thought, once you’re actually there. I rather hope it’s a shift in priorities where living and working becomes more about quality than quantity.

References

1.  “Unretirement Survey.” The Rise of Unretirement: The Harris Poll, Sept. 2019, https://s2.q4cdn.com/437609071/files/doc_news/research/2019/unretirement-survey.pdf.

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