Retirement Redefined: A Growing Trend of "Unretirement"

Retirement Redefined: A Growing Trend of "Unretirement"

December 07, 2023

Retirement, traditionally viewed as a period of relaxation and stepping away from work, is undergoing a significant transformation, as revealed by recent surveys from T. Rowe Price, TransAmerica, and HSBC. The studies found that one in five retirees is choosing to work at least part-time during their retirement years, challenging the conventional narrative of a work-free golden age.

Financial and Social Factors Driving 'Unretirement'

The T. Rowe Price study identifies a key driver for retirees returning to work: financial necessity. Nearly half (48%) of working retirees cited financial reasons for their decision, emphasizing the economic challenges that some individuals face during retirement. However, it's not solely about finances; an almost equal number (45%) highlighted the social and emotional benefits derived from employment.The pandemic has played a significant role in the rise of "unretirement," causing 2.4 million excess retirements, according to the Federal Reserve Bank of St. Louis. This unexpected surge in retirements may have forced some individuals back into the workforce due to financial constraints.

The Nuances of Retirement Intentions

Contrary to the common perception that retirees are universally eager to return to work, the T. Rowe Price study unveils the complexity of retirees' intentions. While 60% of retirees claimed they don't need to work, 12% can't, 10% must, and 18% want to work. This diversity in motivations underscores that retirement decisions are often influenced by a combination of financial necessity and personal preferences.

Shifting Retirement Landscape Among American Workers

Beyond retirees, the Transamerica Center for Retirement Studies conducted a survey highlighting the changing landscape for American workers. More than half (55%) of current workers expect to continue working during their retirement. Health-related reasons (80%) and financial drivers (78%) were cited as the primary motivations for those planning to work in retirement.

Interestingly, the study found that financial considerations, such as the desire for income (52%), may play a more substantial role than health-related reasons in driving retirees' decisions to work.

Financial Challenges Trump Health Concerns in Retirement Planning

As individuals plan for retirement, financial challenges, particularly the impact of inflation, take precedence over health concerns. According to a survey by HSBC, over half (54%) of respondents in the U.S. worry about inflation devaluing their retirement savings. This shift in focus from leisure activities to financial stability highlights the evolving priorities individuals face as they transition into retirement.

In conclusion, the concept of retirement is undergoing a shift, with an increasing number of individuals embracing the idea of "unretirement." Whether driven by financial necessity, a desire for social engagement, or a combination of factors, retirees are challenging the traditional narrative and opting for a more dynamic approach to their post-working years. As the retirement landscape continues to evolve, it becomes essential to recognize the diverse motivations and challenges that shape individuals' decisions regarding work in retirement.


T. Rowe Price Survey

TransAmerica Center Survey

HSBC Survey