The number of retirees returning to the workforce is increasing, says a recent report that cites inflation and labor market changes as reasons why higher numbers of adults age 65 and older are returning to the workforce.
Many people retired in 2020, as they commonly do during difficult times, says MagnifyMoney, but now some of them are returning to the workforce.
The percentages of Americans age 65 and over who retired and were working rose by approximately the same percentage points from late April and early May 2020 to late April and early May 2022:
|
Group |
Late April/Early May 2020 |
Late April/Early May 2022 |
Change, 2020-2022 |
|
% of Americans Age 65 or Older Who Retired |
14.9% |
17.4% |
+2.5 percentage points |
|
% of Americans Age 65 or Older Who Were Working |
19.5% |
21.9% |
+2.4 percentage points |
There is great variation among the states regarding reentry and retirement, says MagnifyMoney in its analysis of Census Bureau data:
Top Five States with an Increase in Older Adults in the Workforce, 2020-2022
|
Rank |
State |
% of Working Older Adults, 2020 |
% of Working Older Adults, 2022 |
Percentage Point Change, 2020-2022 |
|
1 |
New Jersey |
18.1% |
37.0% |
+18.9 percentage points |
|
2 |
West Virginia |
8.0% |
25.2% |
+17.2 percentage points |
|
3 |
Pennsylvania |
14.0% |
28.6% |
+14.6 percentage points |
|
4 |
New Hampshire |
16.5% |
25.3% |
+8.7 percentage points |
|
5 |
Georgia |
18.9% |
27.0% |
+8.1 percentage points |
Top Five States with an Increase in Retirees, 2020-2022
|
Rank |
State |
% of Retired Adults, 2020 |
% of Retired Adults, 2022 |
Percentage Point Change, 2020-2022 |
|
1 |
Mississippi |
13.1% |
20.0% |
+7.8 percentage points |
|
2 |
North Dakota |
11.1% |
18.2% |
+7.1 percentage points |
|
3 |
Louisiana |
12.2% |
19.2% |
+7.0 percentage points |
|
4 |
Illinois |
12.2% |
18.6% |
+6.4 percentage points |
|
5 |
Alabama |
14.5% |
20.1% |
+5.6 percentage points |
MagnifyMoney is not alone—in their 2022 U.S. Retirement Survey, the investment management firm Schroders found that 69% of working Americans plan to work in retirement.
Why?
Older Americans are returning to the workforce for a variety of reasons, says MagnifyMoney:
- job openings have increased and are beyond where they were before the pandemic;
- salaries are increasing;
- vaccination rates may have lessened the fears of Americans who are more elderly—and therefore, more vulnerable—about being around others in the workplace;
- inflation creates economic pressure that consistent income can help address; and
- stock market downturns have engendered concern among older adults about their savings.
And Schroders identified three main reasons why working Americans expect to work during retirement:
- 56% said they would in order to cover basic living expenses;
- 51% said they want to stay busy; and
- 49% said they want to remain active and healthy.
Good Timing?
Older Americans returning to the workforce may not be a bad thing, suggests Schroders. They found that 54% of those age 60-67 said they have saved less than $250,000 for retirement; in addition, 57% of retirees said they saved less than $250,000 when they retired. Furthermore, 44% of retirees said that their expenses are higher than they anticipated.
