The unretirement plan

Whether it’s for money or meaning, more people of retirement age are leaving their retirement, or just not doing it in the first place.

There’s the dream of retirement—the endless golf courses, beaches, freedom, and a lack of responsibility—and then there’s the reality: the anxiety of seeing the bank account no longer rising but shrinking; a shrunken pool of potential social interactions; boredom; purposelessness.

What’s the solution to the malaise, the ennui, and the earnings drop that come with leaving the workforce? Rejoining it. Or never leaving in the first place. Unretirement is the name of the phenomenon, and by all accounts, it’s on the rise.

Right now, in the U.S., approximately one in five people over the age of 65 is employed, according to the Pew Research Center. That’s almost double the employment of the same demographic 35 years ago. And of people who have retired recently, age 50 and older, roughly 10% have gone back to work, says a study by the Transamerica Center.

Some of the re-employment of the last few years can be blamed on the pandemic, where workers only just touching retirement age were retiring in droves and subsequently changing their minds.

“There were a number of people aged 50 and older having life-is-too-short moments and running the numbers to see if they could afford to retire—or some maybe impulsively deciding it was time to retire and run the numbers later—and then deciding maybe it was time to go back to work,” said Catherine Collinson, CEO and president of the Transamerica Institute. “My view is that we should expect to see this trend continue in the future.”

Not everyone goes back to the work for the same reason. A recent T. Rowe Price survey found that nearly half of retirees returning to the workforce are doing it for the money. “We asked people about their financial strategy for retirement, and relatively few have a written strategy. More say they have a plan that’s not written, which means it’s all in their head,” said Collinson. “And if you’ve ever sat down and done a financial plan, it requires some pretty serious number crunching.”

Living longer than expected

Sometimes even well thought out plans go awry. Inflation saps retirement funds, a family crisis turns costly, or, ironically, the retiree stays healthy for too long. “People are living in retirement for much longer than they expected,” says Saba Khan, a managing partner at 1890 Wealth Solutions. “They expected that it would be 20 years, max. Turns out they’re living till they're 90, and they had enough money to make it to 82.”

"Financial professionals who understand these needs and how to best to satisfy them—whether it’s a little counseling or steering them to the right activities—can turn this into an asset."

But a need for cash flow is only half the story. The same T. Rowe Price report said that nearly half of retirees re-joining the workforce do so for the “social and emotional benefits.”

“Most people are still healthy and productive at retirement age, but they’re often tired and a little burnt out from corporate life, so they want a break,” says Herminia Ibarra, a professor of organizational behavior at the London Business School, and author of Working Identity: Unconventional Strategies for Reinventing Your Career. “And then they get bored, and they want to do something meaningful. And work is the thing that gives us, most often, the most meaning. So they go back.”

Khan puts it a little more starkly. “Retirement for many people is probably the hardest psychological adjustment they’ve ever made,” she says. “Because it’s a form of death, it’s the death of the life that they once knew. And with that comes grieving.”

Flunking retirement

In fact, for many, retirement is sure to make them unhappier. (A survey from a decade ago from the Employee Benefit Research Institute showed that dissatisfaction with retirement was already on the rise among retirees.) “In a traditional retirement, there are losses,” says Mark Walton, author of Unretired: How Highly Effective People Live Happily Ever After, which came out this January. “And what I’ve heard from people who have flunked retirement is that nobody told them about these things.”

Those losses assault the individual on three fronts, says Walton. After an initial glee period, retirees begin to feel the pain of what they’ve left behind. The first wallop is the loss of identity. “It’s sort of like a permanent long-term unemployment, this retirement stuff,” says Walton. “You’re no longer who you were, it’s very painful.”

The second is the loss of structure. “This is a well-documented cycle—they wake up every day in the first month or two and they’re just great—what a relief, they don't have to put up with that stress anymore. And after about three months, for intelligent, educated people, there’s suddenly, or gradually, a recognition that ‘Oh, wow, what do I do now with my time?’”

The third loss is the social network. After decades of daily social interactions over desks, in meetings, in the hallway, and around the water cooler, suddenly the regular camaraderie and back-and-forth are gone. “I really miss the social aspect of practicing medicine,” says Dan Barry, a retired doctor in Madison, Wisconsin. “We would see 20 people a day. That’s 20 social interactions a day. All of a sudden, I found myself sitting home, even if I was reading medical journals, talking to one person every day, and that’s my wife.”

“The assignments that you’re supposed to take on in retirement may work for a certain subset—you know, the book clubs and the travel, and the go-back-to-school and all that stuff,” says Walton. “It’s not adequate for people who have really active brains and who know that they have more to contribute. You can’t compensate for those losses. That’s the true lesson of the research about it.”

The marital stress piece

There’s also a fourth disadvantage that’s more like the opposite of a loss: crowding a spouse not accustomed to the constant one-on-one companionship found in retirement. “The marital stress piece—like you're around the house all the time, you're driving me crazy—I know, lots of people who’ve unretired because of that,” says Andrew Resnik, a managing director at Global Atlantic.

Brian Feutz, a retired technologist and now a writer who often touches on the joys of retirement, had a friend who planned on nothing but playing golf in retirement. “After six months he decided golf wasn’t really the kind of thing he wanted to do every single day. And he ended up sitting around with nothing to do. His wife would yell at him to get out of the house, go fix something, go do something,” says Feutz. “So he went back to work at the same company in a different role … at a lower level.”

If the heights of stimulation and interaction found in employment can’t be reached in retirement, they may be better approximated by planning for them the way we’re told to plan our finances. That means looking beyond a few hobbies and vacations. “What I did was, in the morning, I’d take a shower and stand there for a minute or so and pretend that I was retired, even though I wasn’t,” says Feutz. “I’d say, ‘Okay, I'm retired, what am I going to do today? What does my day look like?’ I did that pretty much every day for eight months or a year. And by the time I retired, I had a million ideas about all the things that I would do.”

Not everyone has the self-awareness and emotional knowledge to similarly prepare themselves for the challenge of open-ended days. “There should be a process in retirement, that does include some form of therapy, because it’s a life transition,” says Khan. Our lives are one long stream of milestones—birth, school, college, work, promotions—always pointing to the next thing. “Well, now you go into retirement. What’s next? So, if it was up to me, I’d make every one of my clients go to therapy.”

What financial professionals can do

Of course, one option, to avoid that loss of meaning, is to stay in the game as long as possible. But volunteering and finding other ways of paying back—or forward, if you like—can be just as fulfilling. Anyone with a lifetime of experience can find a way to teach what they know to the next generation. Critical information is imparted to those who need it and the retiree stays engaged, interacts with fresh colleagues, and can even make a few bucks.

Financial professionals who understand these needs and how to best to satisfy them—whether it’s a little counseling or steering them to the right activities—can turn this into an asset. “They can market themselves has having unique expertise in some of the unknown challenges of retiring,” says Resnik “In other words, sharing success stories with their clients to empower them and take away some of the stress about retirement by giving them real life ideas from some of their other clients.” Collinson concurs: “The potential role of the financial advisor is evolving and expanding, beyond financial advice, to life advice.”

Recent retirees who are thinking of rejoining the workforce to restart the cash inflow are going to have a more difficult time. Ageism is real. And anyone hoping to go back into the field they retired from will likely have to settle for a lower rung. But lately, there’s fresh hope for retirees looking to work again. A Transamerica survey from May, Stepping Into the Future, found that roughly seven out of 10 medium to large companies had given a “great deal” or “quite a bit” of consideration to applicants over the age of 50. And, what’s more, there’s help out there. “There are an increasing number of programs where people can go to reinvent,” says Collinson. “Harvard has one, Stanford has the Distinguished Careers Institute, Claremont Graduate School has a new one coming online.”

That continued employment, whether continued or regained, may be just the thing to keep life meaningful. “Based on studying folks who have continued to work, in some cases, into their 80s and even 90s, they will tell you that that’s what their life is about,” says Walton “That’s what keeps them healthy, gives their life quality, and keeps them alive.”