Why Pandemic Retirees Have To Head Back To Work
Written by
Yaël Bizouati-Kennedy
Edited by
Cory Dudak
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Since the pandemic, the retirement landscape has drastically changed, with many seniors either working longer or deciding to re-enter the workforce. One important driver is the income stream it provides once they transition to a fixed income. Now, a new cohort is re-entering the workforce — “pandemic retirees.”
As Bloomberg explained, some at the time retired out of fear of catching COVID-19, but soaring housing and stock prices, especially earlier in the pandemic, probably pushed others to make the leap.
Yet, now, some seem to have second thoughts. The number of excess retirees — older Americans quitting work at rates above historical trends — is down 20% since the end of last year, Bloomberg reported, citing data from economists at the Federal Reserve Bank of St. Louis.
And Judith Ward, a certified financial planner and thought leadership director for T. Rowe Price, told AARP that many of the “excess” retirees from the height of the COVID-19 pandemic — 2.4 million people who retired before they would have been expected to — have now chosen to unretire.
Why American Retirees Are Returning To Work
It’s not surprising that many of the aforementioned retirees are planning to rejoin the workforce. Some of the drivers include high interest rates, which have taken a toll on many Americans, as well as inflation and choppy markets.
And the numbers speak for themselves: A 2023 Paychex survey found that one-in-six retirees are considering returning to work after being out of the workforce for an average of four years. A full 55% of respondents who returned to work did so because they needed more money.
Additional reasons retirees are “un-retiring?” The need for health insurance coverage (33% said as much), inflation (41%) and fear of outliving savings (23%), the survey found.
According to a T. Rowe Price report: “Whether people unretire or simply stay in the workforce longer, some of the largest financial benefits of additional years of work are delaying retirement account withdrawals and delaying claiming Social Security benefits.”
“These actions essentially shorten the amount of time your assets will need to support you in retirement. Even a few additional years of income have a positive effect on the probability that you won’t outlive your funds,” the report indicated.
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