Retirement may sound like the long vacation you never got to take; however, many retirees find that retirement isn't all it was cracked up to be. In fact, a recent study by Resume Builder found that 1 in 8 retirees plan to go back to work in 2024.
Some may miss the feeling of daily accomplishment. Others may discover, as they're pulling money from their retirement accounts on a regular basis and paying taxes on it, that they need more money to live on. That may be because they’re spending more on hobbies or travel to fill the day, or paying for expensive health insurance on the open market if they retired before being eligible for Medicare.
For some retirees, it may be that they are returning to work just because they want to.
"I found that many retirees go back to work simply because they're bored," said Brandy Marion, institutional wealth education and training manager at BOK Financial®, who delivers frequent workshops on retirement.
So, should you go back to work? First, there are some considerations.
What type of work do you want to do?
Start by looking at your passions. Do you have hobbies you could use to make money? For example, if you’re an accomplished artist, maybe you could sell your work at festivals and farmers' markets as a pop-up vendor or online through sites like Etsy.
If you don't need to return to work for the money, what organizations could you volunteer for that support your passions? Work with animals, apply to be a docent at a museum or inquire at local libraries about reading to kids.
"I see many retirees returning from retirement because our ego is tied to our jobs. We think that we can walk away from it, but it's that sense of purpose," said Marion, who added to choose something fun.
“What was your passion that you didn't have time to do for 40 years, or that you could only do on Saturdays? Start there!”- Brandy Marion, institutional wealth education and training manager at BOK Financial
Could you go back to your old company?
Retirees who go back to work for a previous employer are frequently called "boomerang employees" and the situation can be a win-win for you and the company.
“You may have expertise that younger or less-experienced potential employees don't have,” said Marion. “You have enough good feelings about the company to want to work there again, and you're eager to work.”
If that the case, you may want to ask your previous employer if you can come back full-time, part-time or as a contract consultant for special projects.
What are the logistics?
You may need to consider your skills for the current job market. Artificial Intelligence (AI) is transforming how we work and making some jobs obsolete. With that in mind, you may need to take some classes to qualify for the roles you seek.
Also, consider transportation. If you've been out of the working world for a while, you may have given up your car, reduced how much you drive or put off getting that much-needed tune-up.
You also may have become used to a flexible schedule. Are you willing to give up sleeping in or afternoon naps? Give yourself time to get readjusted to being on a schedule and having a commute.
Ask the right questions when interviewing
Consider how much you're physically capable of. Would the job require being on your feet for hours? How many hours are you willing to work? Marion recalled meeting a woman working at a rental car agency who came out of retirement for something to do. It was only supposed to be for a few hours a week, but gradually they asked more from her.
"An employer may look at you and say, 'Wow, here's somebody that wants to work!' Now you're the go-to person they call because you're retired, don't have kids to watch and can come in at the last minute—ask how often they'll be calling," Marion suggests.
Benefit considerations
If you retired before age 65 and are paying for your health insurance on the open market, returning to work and an employer-subsidized health insurance plan would be one way to reduce that expense. "If you can get on their plan and pay less for healthcare, that means you're not pulling money out of your retirement account, so it's getting to grow a little bit more," she said.
Be sure to ask if you would qualify for benefits like subsidized insurance, 401(K) contributions and paid time off (PTO). There are some companies that offer benefits for part-time work. However, if you don't qualify for employer-provided benefits, you still could use the income to cover your health insurance expenses and generate some discretionary spending money for things like travel.
Most employers offer employees some sort of retirement plan. "Ask if you qualify for it and the employer match," said Marion. "Again, it's getting a little extra ‘free money.’"
If the employer's retirement plan has lower fees than your retirement account, you can also roll some of your money into that plan, which decreases another expense.
Social Security implications
If you started collecting Social Security benefits before your full retirement age of 67, keep in mind your benefits could be reduced when you go back to work. The Social Security Administration deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2024, that limit is $22,320. Look into options such as paying back the benefits you’ve received so far or pausing your benefits and restarting when you’re ready to fully retire.
And so, if you decide to go back to work for any number of reasons, remember to check on benefits, see how you can monetize your passions and, most of all, enjoy your next chapter!
. © 2024 BOKF, NA.