Retirement Jitters
Something seems to have spooked retirees, and near retirees. There has been a noticeable uptick in delaying retirement, and even coming back into the work force from retirement.
According to a survey reported in the trade publication Investment News, two-thirds of those in their 50s or early 60s have thought about delaying retirement, or have already done so. Nearly half of the surveyed retirees (44%) have returned to the world of work, or are considering it. Financial insecurity is the primary driver of the phenomenon, according to the survey. Persistent inflation and increasingly volatile financial markets have caused many to reassess whether they really have adequate resources to retire. Many in this age group may recall the economic challenges of the late 1970s, when inflation was more severe.
However, financial worries are not the only factor. Some people just love their work. Some appreciate the mental stimulation of being in the workplace. Some feel that employment adds purpose to their lives.
A survey by payroll company Paychex had similar results. One-sixth of retired respondents were considering a return to work after an average of four years in retirement. Of those who had “unretired,” 55% said they needed more money, 47% said they had gotten bored in retirement, 45% gave personal reasons, 41% expressed worries about inflation, and 33% needed health insurance coverage (multiple answers were allowed). Many of these were asked by a former employer to come back to work because of a labor shortage, and 59% reported working remotely.
60% of those left retirement were happy with the experience of going back to work. 50% said they were energized, 48% were excited, only 27% were nervous. However, 71% reported that younger employees had occasionally made them feel insecure about their abilities.
Despite the trend of have longer or second careers, the fact is that the labor force participation rate of those age 65 and up remains well below what it was before the pandemic, according to The Wall Street Journal. In February 2020, 26% of those 65 and older who were not disabled were working, a modern peak. The pandemic and the recession triggered a great many retirements, bringing the participation rate down to 22.7% by July 2021. In August 2023 the rate stood at 23.7%.
Are you concerned about your retirement readiness? We’d be pleased to discuss your situation and offer our insights for today’s retiree.
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