What is ‘Unretirement’ and Can It Work for You?

Gone is the expectation of lifelong employment at one job that pays a pension upon retirement. Gone, even, is the idea of retirement as a major life milestone. Instead, working past retirement is a growing trend, and one that can yield satisfying benefits — both personally and financially.

What Is Unretirement?

‘Unretirement’ is employment, whether part-time or full-time, after retirement. A recent survey conducted by The Harris Poll found that 1 in 3 Americans ages 40 and older plan to work after retirement. Of that group, most plan to work their entire lives. And according to the U.S. Bureau of Labor Statistics, 40% of people ages 55 and older were working in 2014, a percentage experts believe will increase through 2024.

What Are the Financial Benefits?

The financial impact of working past retirement age is, by and large, positive. In addition to the obvious perk — extra income! — there are investment and Social Security boons to consider.

If you’re able to work into your 60s, earning a part-time income yields more in one year than simply putting money into savings. This means you might not have to dip into your retirement nest egg; in fact, you can even add to it. It also means you can wait to claim Social Security until age 70.

Working past retirement age can also boost the amount you receive from Social Security. Your benefits are calculated based on the average of your monthly earnings during the 35 years in which your earnings were the highest. If there was a period of time during those years when you earned very little, then unretirement can off-set those amounts.

If you’ve already started receiving Social Security, but want to go back to work, don’t fret. You have options. You can:

• Suspend benefits for a higher payout: If you’re already at full retirement age, it’s possible to halt Social Security benefits while you go back to work, and enjoy an 8% delayed retirement credit for every year you wait to collect.
• Collect benefits while also earning a paycheck: There is nothing that says you can’t work and collect Social Security, but be aware that returning to work could temporarily decrease your payouts if you’re not at full retirement age.
• Claim a Social Security do-over: As long as it’s been less than 12 months since you started collecting benefits, you can withdraw your Social Security application and pay back what you’ve collected.

What Are the Personal Benefits?

Financial need isn’t the only reason to continue working after you retire. The Harris Poll survey shows 70% of people say they choose unretirement as a means to “stay sharp.” And research shows people who delay retirement have less risk of developing Alzheimer’s.

Other benefits may include personal fulfillment, learning opportunities, emotional support, social engagement and decreased boredom.

What’s the First Step to ‘Unretire’?

Unretirement can take many forms. Ask yourself what you’d like to do, what fits your schedule, and how your particular set of skills can be useful. Then, talk to your Farm Bureau agent to discuss the savings and investment strategies that make the most sense if you choose to continue working after retiring.