How to Unretire | Second Careers

After spending time in retirement, some individuals opt to look for work again. Entering the job market in retirement can bring its own set of advantages and potential drawbacks. Before filling out an application, you’ll want to think through your financial situation and how your retirement benefits will be affected, along with your employment interests and preferences.

To “unretire,” a good starting point involves:

  • Understanding why retirees head back to work.
  • Considering your home life and budget.
  • Looking at the job options available.
  • Checking the impact on your Social Security benefits.

Here’s a look at what it’s like to unretire and how returning to work can affect your retirement benefits.

Why Retirees Return to Work

A lack of financial resources is one of the main reasons retirees look for new sources of income, such as returning to work. “Many retirees live off a fixed income,” says Jeff Kronenberg, founder and president of Imagine Wealth Group in Ridgefield, Connecticut. Their incoming funds might consist of Social Security benefits and withdrawals from retirement accounts. These withdrawals are often based on the earnings generated by an account and not the principal, which is the amount originally contributed to the investment. When prices go up, retirees may have to dip into the principal, which can be unnerving. If the stock market performs poorly, portfolios might go down in value. Rather than taking money from these diminished accounts, retirees might instead opt for a job.

Another motivating factor that sends individuals back to work stems from inactivity. If you don’t have hobbies or if your schedule is very open, boredom can set in. “Many people get antsy and want something to do,” Kronenberg says.

Some retirees may find their curiosity leads them to a new career path. Perhaps you always wanted to try a different field of work. With your extra free time in retirement, you could use your hours to study for a new career or try out a part-time job in an area that you find interesting. Pursuing a different path could lead to a sense of accomplishment and new success.

When to Consider Unretiring

If you find it hard to make ends meet financially, you may want to review your budget and evaluate your desire to work again. If you would prefer not to go back to work, there might be certain costs that you can reduce or eliminate from your living expenses. If you would prefer to earn more money instead of cutting back expenses, it may be time to look for a job.

Other family members may factor into your decision to take on a new job. If you are the main caregiver for a spouse, you may not be able to return to work unless you hire someone else to provide care. Or perhaps you and a spouse will each return to work for part of the year to earn more money so you can achieve travel goals.

A job can also provide a sense of purpose, especially if the job helps others. If a life event alters your retirement plans, a job could fill a void. “With age comes the possibility of losing a spouse, or kids might have moved out of state, and you find yourself lonely,” says Ron Tallou, founder and owner of Tallou Financial Services in Troy, Michigan. “If you’re craving human interaction, going back to work can help by creating new friendships with colleagues, which would improve overall mental health.”

How to Get Back Into the Workforce After Retirement

If you are interested in employment opportunities, it can be natural to consider returning to your previous employer. You might reach out to your former boss or coworkers to start a conversation. You could be offered a part-time position or asked to be a consultant, drawing on your years of experience on the job.

For some positions, you’ll want to think about your health and energy levels. “If it is a physical job, can your body still keep up?” says Jim Eutsler, a wealth advisor and partner at HCM Wealth Advisors in Cincinnati. “Are you willing to learn new technology that may have been implemented since you left?” If you currently don’t set an alarm in the morning, you might have to adjust to rising earlier for certain jobs.

With so many tasks carried out online, you might find a remote position that allows you to work from home. You could also ask about flexible hours, especially if you prefer to set your own schedule and work at your own pace. If you’re interested in being around other people and socializing, an in-person setting might be a better fit.

How Returning to Work Affects Retirement Benefits

If you are receiving Social Security benefits, the amount you receive could be affected by going back to work. It depends on your age and how much you earn. Certain thresholds of wages will cause your benefits to be withheld for a time, though it could also result in bigger payments later.

Once you reach full retirement age, which for many people is age 66, you can work and your Social Security benefit will not be reduced. If you are receiving Social Security checks and working before full retirement age, your benefit could be temporarily withheld. Individuals who are not yet retirement age and earn more than $19,560 in 2022 will have $1 taken out of their Social Security payments for every $2 earned above the limit. During the year you reach full retirement age, $1 in benefits is deducted for every $3 earned above the higher limit of $51,960 in 2022 for the months before full retirement age is reached.

Starting the month you reach full retirement age, your benefit amount will be recalculated. You will get credit for the months your benefits were reduced or withheld because of your excess earnings, and you could even get higher payments due to your continued earnings.


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