Second Act? Rethinking Retirement in the Age of Inflation
A growing trend called "unretirement" is evident in New Jersey and across America as rising costs of living lead many retirees to return to work out of financial necessity. Nearly 83 percent of respondents thinking about unretiring said they were concerned about their finances overall, with 39 percent saying they were highly concerned. Nineteen percent said their retirement savings are very much lacking when it comes to covering their costs of living.
A recent study by NJ Spotlight News revealing that 63 school districts and 3 charter schools employed retired teachers under a special program designed to address the state's ongoing teacher shortage. This program allows retired educators to return to work for two years without reenrolling in the pension system, enabling them to collect their retirement benefits while earning a salary. While the number of returning teachers is still small, it represents a growing trend driven by rising costs of living and a desire to remain engaged.
Not all baby boomers are living the high life and buying real estate in cash.
The median retirement savings for boomers is around $134,000, far short of the recommended $1.1 million for a comfortable retirement.
69% of those considering unretiring cite rising living costs as the primary driver.
Nationwide, a survey from ResumeBuilder.com found that 1 out of 5 retirees are likely to return to work this year. The primary reason cited is the increasing cost of living, with 69% of respondents pointing to inflation as the main motivator. This is no surprise, given that the United States is currently experiencing its highest inflation rate in decades.
Many retirees are finding their finances stretched thin due to rising prices. The survey found that 39% of those considering unretiring said their daily expenses have increased greatly over the past three months. Additionally, nearly 83% expressed overall concern about their finances, with 19% admitting their retirement savings are insufficient to cover their living costs.
While inflation is a major factor, it's unclear whether it's the sole reason for the "unretirement" trend. A separate analysis from Indeed's Hiring Lab found that 3.2% of individuals who considered themselves retired a year ago have re-entered the workforce this spring. Notably, this study attributes the trend to increased hiring demand rather than solely to financial concerns.
For those choosing to unretire, switching careers is the most popular option. The ResumeBuilder survey revealed that 58% of potential unretirees would prefer a different industry altogether. Only 19% would return to their previous employer, and 23% would seek a new employer within their current field.
Remote work is also emerging as a desired option for many unretirees. Nearly 31% expressed a preference for remote positions, with an additional 18% stating they would only return to work if they could telecommute. This preference is likely driven by both the financial benefits of remote work and concerns related to the COVID-19 pandemic.
The "unretirement" trend is likely to continue in the face of persistent inflation and a changing job market. As retirees re-enter the workforce, it will be important for employers to adapt their recruitment and retention strategies to attract and retain this valuable talent pool.
