Unretirement – Retirees Returning to Work
Al Waller: While many people enter retirement and never look back, there is an unusual pandemic-related trend that’s now occurring, and that involves retirees returning to work in what has been coined “unretirement.” According to the Federal Reserve Bank of St. Louis, more than 2 million Americans retired in the first 18 months of the pandemic, accounting for more than half of the people that left work at the same time. But since then, about 1.5 million retirees have gone back to work, according to an analysis of the Department of Labor data done by Indeed Hiring Lab.
Welcome back to ClearPath – Your Roadmap to Health & WealthSM. I’m your host, Al Waller. With me is Catherine Collinson, CEO and president of nonprofit Transamerica Institute®. Today, we are going to look into this recent phenomenon to learn more about what is behind it.
Before we get started, I want to remind listeners that we would love to hear from you and know what topics you would like to hear about. Please drop us a line at [email protected].
Catherine, nice to be together again.
Catherine Collinson: Al, it is wonderful to be back! What a big topic! As we all know and experienced, the pandemic upended nearly every aspect of our lives – it is not surprising that retirement has been disrupted as well.
You and I both know people who subscribed to the “unretirement” trend. During the pandemic, I can think of at least a couple of friends who just decided to retire. Things were going on with their employers and their family lives. It was just too much, and they packed it in to retire. But now that the pandemic seems to be coming to an end or at least morphing into something else, in talking with these friends – they weren't ready. They missed their professions. They missed the people. They missed their sense of purpose. And they missed their paychecks.
Al Waller: Lest we forget that! Sure, the additional income is always a nice incentive. I do have a number of friends who weren't quite ready to totally detach from their careers, even though they certainly could have financially.
A friend of mine, Tim, decided to come back – but scale back – to a two-day a week consulting capacity for his firm. He still likes what he does/did, and he's really pretty good at what he does – he’s just not quite ready to spend every day of the week on the golf course.
I had another friend, Kimball, who was a commercial airline pilot for many years but was hit with the “mandatory retirement” at age 65 and really missed it. It was in his blood – I know that because my father flew as well. What he was able to do – his work around – was to go back and train pilots as a flight instructor.
I think what we are really seeing here is the common thread for these people and a lot of others out there. It really comes down to your personal fulfillment. To borrow the old adage “if you love what you do, you'll never work a day in your life.”
But now, Catherine, I would really be interested in some of the broader perspectives you would be able to share.
Catherine Collinson: Of course, as a retirement researcher looking at trends over time, what we saw happen in the pandemic was really quite astonishing. If we back up before the pandemic, in the many years that we have surveyed retirees, we often have found that a majority retired sooner than they had expected or planned – and more often than not, it was for either employment related issues or personal health reasons. So, people retiring sooner than planned or expected is not new.
But what we saw happen in the pandemic was unbelievable – we were surveying more frequently…and especially during the year 2020, we saw older workers exiting the workforce in droves. It was something we had never seen before in our research. And our research was consistent with the government surveys and the research that you cited in your opening.
For me, it just raised the really big question…are these people who decided to retire during the pandemic financially, emotionally, and spiritually ready to retire? Now that we are seeing this new “unretirement” trend, I think in many cases the answer was no – they were not ready.
Al Waller: I absolutely get why some retirees are feeling financially pressured to return to work. Most of us could not have anticipated the inflation we are now experiencing, and as a result, may be having a really hard time making their retirement nest eggs stretch. And by the way, even those who amass larger retirement savings may be beginning to also find the current economic environment intimidating as well – right?
Catherine Collinson: Of course, it is scary. Taking the long view and looking at our years of research, our team and I have consistently found that both workers and retirees cite “running out of savings or outliving their savings and investments” as one of their greatest retirement fears. Since the onset of the pandemic – the financial markets, including 401(k) accounts – have been on quite a volatile roller coaster ride, which very well could be even further fueling these types of fears.
Then, if we pull back, the reality is – our research finds that many people are not adequately saving for retirement, and they will need to continue working, at least longer to an older age, to help bridge that savings gap. Then, especially for older workers who retired during the pandemic before they were financially ready – going back to work makes all the sense in the world.
I just want to add one other thing. I think of a good, good friend – I consider her a mentor in retirement. She retired in the summer of 2008. Well, you can imagine what happened in the fall of 2008 and 2009 when there were steep declines in the financial markets.
She was able to go back to work, and it worked out. When she left her employer, she left on excellent terms. They missed her. They realized they needed her help – it was doing something different. It was working part-time doing training and mentoring of her successors. But they were able to bring her back, and that really helped ease the blow of what happened in the financial markets. She continued working 5 more years.
Al Waller: Research also finds that many workers and retirees cite healthy-aging related reasons for wanting to come and work longer or in retirement. Perhaps you could provide us with some insight as to what those reasons are.
Catherine Collinson: This is a really exciting trend that we've seen in our research, even before the pandemic. In fact, it might be one of my one favorite trends as a researcher because it opens up that the whole idea of living longer and better – and even working longer – helps financially. But people are recognizing that it can enhance the quality of their lives.
Over the years, we find that around half of workers expect to retire after age 65 or do not plan to retire. Even more plan to continue working at least part time in retirement. We asked them the reasons for doing so – what we call healthy-aging related reasons include things like enjoying what they do, wanting to be active, keeping our brain alert, having a sense of purpose, social connections, and personal development.
So, it stands to reason for me, people who retired abruptly during the pandemic – because it was a pandemic…all sorts of things were happening – may very well be coming back because they miss all of those things too…enjoying the work they do, the people they work with, having that sense of purpose, and staying active and keeping our brains alert.
Al Waller: I think that all really resonates. I think a lot of people just quite frankly…when you stop something like that abruptly, you may not find yourself prepared for that, and the word “boring” seems to be bantered around a lot – “what am I going to do now?” You do need that type of stimulation and having that sense of purpose or calling, if you will.
Now, I have heard that working brings routines that can be important for older people to maintain their physical and mental health. Maybe you could sort of touch on that if you would.
Catherine Collinson: Academic studies out there are finding that working into older age – up to a certain point – can positively influence one's health, which is really quite extraordinary.
I'll share a personal story. When I think about my grandfather, who retired many decades ago – he retired early due to health issues. He had a company doctor. He went into the physical, and he said, “Doc, will you guarantee me ten more years?” The company doctor looked at him and said, “I can't guarantee you 5 - your blood pressure is through the roof, your cholesterol is through the roof – you’re a time bomb.”
Something extraordinary happened! My grandfather went to Weight Watchers on his way home, then sat down at the kitchen table with my grandmother. They ran all the numbers every which way they could to figure out how he could retire, and that's what he did!
He took a year off. He lost the weight. He got in shape. He got healthy. Then…he went back to work – doing volunteer work – for another close to twenty plus years, and that was the work he loved. That was the work he considered his legacy. And by the way, he outlived that company doctor by a good 10 years!
Al Waller: What a fitting end to that tale! That's just awesome. Here again, you've got to take care of yourself physically, but the mental piece has got to be there.
What other factors are contributing to this new “unretirement” trend, Catherine?
Catherine Collinson: As challenging and daunting as the pandemic has been, it's actually brought some positive changes. I'll call them silver linings. It relates to work, the nature of work, and the workforce. By the way, these positive changes affect workers of all ages and can be especially beneficial to older workers, who are looking for work or looking to return to work.
What are these changes? Flexible work schedules, including remote work – the flexibility to be able to adjust your schedule/to telecommute. These have been readily embraced by employers during the pandemic. Another thing is – we will see if this continues…there's been a lot of reduction of business travel, which is hard on everyone.
Also, what's particularly helpful – we're in the tightest labor market since I can remember in my lifetime, and employers are discovering the value of older workers as a real opportunity to enhance their overall workforce management. So really, if you're thinking about “unretiring”, the time has never been better to do so.
Al Waller: Absolutely–I think a lot of employers have also discovered there is the work ethic of a certain generation.
What advice would you offer to people who “retired” during the pandemic but are now wanting or need to work – or using your vernacular, “unretire”?
Catherine Collinson: The first opportunity is to just step back and think about what's really important to you? What do you want to do? Do you want to go back to the same profession that you had before – how feasible is that? That is one obvious pathway.
The pandemic has inspired us to look at our lives and our world very differently. Is there something new that you want to try out that you could translate your skills and experience to and apply them in a new and different way?
Then the other thing is just understanding the job market in terms of the types of opportunities that might be available for you. For some people, there is a financial need and a need for employee benefits to go back to work. For others, it is more for purpose and impact. Also, put volunteer work on your radar screen or working for a nonprofit. Nonprofits often pay less than for-profit organizations – but that could be a whole new pathway for you as well. It is an opportunity to think big, use your imagination, and explore new possibilities.
A couple of other things we talk about often on the show – the importance of doing your homework. You have got to be realistic about the type of opportunities that are out there. And there is a financial element that I want people to really think about in case it applies to them. That relates to social security benefits.
If you retired during the pandemic – or maybe before the pandemic – and started collecting Social Security…and now you want to go back to work, from an income and taxation situation – does it make sense for you to suspend those benefits while you get paid employment?
There are all sorts of different scenarios, and they are very unique and personal in nature. Rather than giving a rule of thumb, I just want to raise the flag that if you do fall in this category – you’ve got to do your homework to come up with financial decisions that are going to work best for you.
Al Waller: Makes perfect sense to me now. How about those folks out there who haven't hit the job market in quite a while? What sort of techniques or strategies would they need to employ in order to be successful in getting back into the game?
Catherine Collinson: When we present ourselves to the marketplace – to our prospective employers – we have to shine, and this applies to everyone. Something that is so hard… I talk to people that get overwhelmed – you'll hear the expression all the time “you've got to create and cultivate your personal brand.” We live in this day and age of the influencers who have cultivated their brands – but then, it just can feel overwhelming. What does that mean to me personally?
In my experience, the idea of creating your personal brand is really knowing who you are and what you are about and what you value – and to just reflect that in how you present yourself, how you talk about yourself, how you talk about your work, and how you talk about your experience.
But it is just a matter of knowing what your own personal “best foot” is and putting that own personal “best foot” forward.
Let's touch on resumes – the art of resume writing is changing constantly. The first part is just gathering all your skills and experience you think are really important for sharing. The other is to modernize your resume along with current practice. Part of it is presentation. Part of it is impact. And part of it is keyword searches – so that you get through those HR firewalls when you are submitting those resumes.
The last couple of things I'll share – your LinkedIn profile is so important. That's a great opportunity to have a fresh photo of yourself, to talk about your skills, your experience, and present yourself to prospective employers, as well as reconnect with old friends who are on LinkedIn and start networking.
I just want to point out that recruiters are paying very close attention to LinkedIn. So, getting your profile all spiffed up and indicating that you're open to possibilities or you're seeking an opportunity could be very helpful towards achieving your overall goals.
Al Waller: Those are some really great ideas, Catherine. Especially for those who have been in the workforce for some time, maybe trading off and going to that functional resume, which really highlights your strengths up front versus the chronological type. Absolutely, make sure that LinkedIn profile shines, have a current and fresh-looking picture there to let them see what you are about.
When it comes to the resume, I can tell you – having been on that side of the desk of hiring – two sides of one page is plenty. Beyond that is just overkill. That's why we conduct job interviews. You don't need to hit everything you've done from day one there.
What else have you got on your mind as you think about people “unretiring”?
Catherine Collinson: I will just leave you with some thoughts we've already touched on. If you are retired and thinking about “unretiring”, there has never been a better time to do so.
Again, I invite people to use their imaginations, think big, explore new possibilities, and see what's out there. It could open entire new pathways that you never thought about before. Doing so can be enriching professionally but also in terms of making friends, getting more involved in your community, and a whole host of other benefits.
Al Waller: As you pointed out earlier, there has never been a better time – with the job market as it is – to go out there and test those waters.
Thank you so much for your insights as always, Catherine. It's great to have you with us today.
Catherine Collinson: Well, thank you, Al.
Al Waller: We hope you’ll join us for future episodes. Also, in case you missed them, check out previous episodes including “Challenging Myths About Aging” and “Saving Money During Inflation.”
ClearPath – Your Roadmap to Health & Wealth is brought to you by Transamerica Institute, a nonprofit private foundation dedicated to identifying, researching, and educating the public about retirement security and the intersections of health and financial well-being. You can find our weekly podcast on WYPR’s website and mobile app, wherever you get your podcasts, and at transamericainstitute.org.
ClearPath – Your Roadmap to Health & Wealth is produced by Transamerica Institute with assistance from WYPR.
If you have ideas for future episodes, comments, or feedback, please let us know! Email us at [email protected].
Until the next time, I’m your host Al Waller. Stay safe, be well and thanks for listening.
The information provided here is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, investment, legal, medical, or financial advice or guidance.
