There might be a Great Resignation going on in some parts of
the American workforce, but other parts are witnessing a Great Unretirement. A
recent report from the AARP, citing data from the Indeed employment website,
found that 1.7 million Americans who retired a year earlier have returned to
the workforce. That represents just more than 3% of overall retirees.
They’re not just going back to pad their bank accounts with
fresh paychecks, either. Many are driven by other factors, ranging from stock
market volatility to a desire for more social interaction. The majority are
working part-time.
Here’s a look at five reasons formerly retired Americans are
returning to the workforce this year.
Inflation
The U.S. inflation rate hit 8.3% in April, continuing a recent
run that has seen prices surge to their highest levels since the early 1980s.
At the same time, the Social Security Cost of Living Adjustment (COLA) for 2022
is only 5.9%, meaning that retirees who depend on Social Security for a good
part of their income are fighting a losing battle against inflation.
This has convinced many retirees to head back to work.
“The purchasing power of retirement savings is eroding every
single month,” Sinem Buber, lead economist at ZipRecruiter, told AARP. “This is
quite new for them, and it’s scary.”
Stock Market Woes
The Dow has fallen about 10% so far in 2022 after spending
much of the previous decade soaring to record highs. The S&P 500 has dipped
even more this year. The result is that many retirees have seen their 401k
balances decline just as prices have skyrocketed. In some cases, retirees have
little option but to return to work.
“These people who are retired are the same people who lost a
substantial share of their retirement savings back in 2008, and they barely
recovered,” Buber said. “They have started recalling those bad memories and
thinking, maybe I need to work for a couple of more years to recover what was
lost.”
Rise in Remote Work
Perhaps the biggest impact the COVID-19 pandemic had on
professional life is that it forced many companies to adapt to work-from-home
arrangements during lockdowns. They turned to technologies like Zoom and Slack
to make it easier for employees to work remotely. More than a few employees
liked the arrangements — especially older workers who have grown tired of long
and expensive commutes.
Even with the pandemic easing, many companies still offer
remote and hybrid arrangements — a paradigm which has lured a large number of
retirees back into the workforce.
Rising Health Costs
As of April, the cost of medical care services had risen
3.5% from the previous year, AARP noted. This has proven especially burdensome
to retirees. According to Buber, the average cost of health care for older
workers is about three times what it is for young working adults. Retirees who
aren’t yet eligible for Medicare are returning to the workforce strictly for
health care coverage.
Social Interaction
Seniors tend to be more isolated than younger folks, and
that reality only worsened during the pandemic. For retirees, returning to work
provides a way to avoid loneliness.
“We have a real serious issue in this country of senior
loneliness and depression. The pandemic really exacerbated that,” Andrew
Meadows, senior vice president at Ubiquity Retirement + Savings, told AARP.
“Many seniors were forced to stay at home, and now they are thinking of
entering the workforce again for social interactions.”
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