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Whether you were forced out of the workforce due to downsizing, a recession or other reasons, you might’ve retired thinking you were done with work for good. But unretirement might change that, whether it’s because you need the money, you miss the social engagement or some other reason entirely.
You don’t have to stop working at some magical age. Even if you don’t want to go back to what you were doing before retirement, you can find meaningful, paying work. Here’s how to know if unretirement is right for you.
What is unretirement?
Unretirement is leaving retirement to return to work, for whatever reason. Some workers might have been forced to retire early due to the COVID-19 pandemic, or a company downsizing might’ve made them believe they can’t work anymore. But that’s not always the case.
Unretirement means you don’t have to stay retired. With the rising cost of what seems like everything, you might be forced back to work even if you were comfortable in retirement. And with 7.6 million open jobs right now, you can explore new ways to work even if you had previously thought you were done working for good.
If you’re debating going back to work due to financial reasons, speaking with a financial advisor is a great idea. An advisor can help you analyze your budget and explain how returning to work may impact your Social Security benefits and overall retirement plan.
5 ways to tell if unretiring is right for you
If you’re thinking about unretirement, here are a few ways to tell it’s time to make the move.
1. You need the money
Whether you’ve started cashing in on Social Security and your retirement accounts or not, if you don’t have enough money to cover your basic needs, then unretirement may be a necessity.
Do an audit of your budget, expenses and income. If you don’t think your current income will cover you for the long term, you may want to start putting feelers out for work again.
2. You don’t qualify for retirement benefits
If you’re too young to get Social Security and taking money out of your retirement accounts would trigger an early withdrawal penalty, you may need to work to cover your needs. Social Security doesn’t kick in until age 62, and 401(k) and IRA withdrawals will trigger a 10 percent penalty if you make one before you’re 59 ½ years old.
Without these extra cushions, you may need to work for a little while longer until benefits kick in.
Need an advisor?
Need expert guidance when it comes to managing your investments or thinking through unretirement?
Bankrate’s AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals.
3. You want to work
Unretirement isn’t just for people who need it. It’s also for people who want it. If you’re bored, working might give you a sense of purpose and drive. Some workers might feel like they are too young to retire or don’t have enough to do without some type of paying job. You can work simply because you like the idea of working and getting paid for it — and that’s OK. You can explore the best side hustles for retirees and passive income ideas if you’re not ready to return to a regular 9-to-5 job.
4. You need the mental health boost
Many older Americans who don’t work may not have found an outlet to devote extra time to. Staying at home and, for example, watching TV all day can take a toll on your mental health, and being out of the workforce may make you feel socially disengaged.
Working later in life can reduce dementia and boost emotional, cognitive and mental health. While it’s not required to work a paying job — volunteering may also fit your needs — some people might pair the desire to work with mental health benefits.
5. You want to keep moving
Many of us use goals as driving forces for getting things done. The physical benefits of work can keep your weight manageable and boost activity levels. But for some people, the idea of having a place to go or tasks to accomplish is enough of a driver to stay moving. Working later in life could also lead to living longer for some workers, which is another motivation to unretire.
Bottom line
Retirement doesn’t have to be forever, and it isn’t for everyone. Whether you were forced into retirement or just haven’t been able to find work in a while, you don’t have to stay that way. If you’re on the fence, consulting with a financial advisor may be able to help you clarify your goals and financial needs for this stage of life.
You can head back into the workforce regardless of age. Try to find something that works for you, including your income needs, your skills, your lifestyle and long-term goals.
— Bankrate’s Rachel Christian contributed to an update of this article.
