A senior woman working in a garden shop. She is wearing an apron, carrying a tablet, and tending to a plant.

Unretirement: Is it Right for You?

The cost of living is soaring, retirement funds have dipped with recent stock market uncertainty and the job market is booming. Many employers are offering bonuses, higher rates of pay or other incentives to sweeten the pot to entice workers. All these factors have prompted many retirees to choose to continue working or to even consider reentering the workforce full or part time.

Even though the number of retired workers over 65 has increased by 3% over pre-pandemic levels, the number of older people who are continuing to work has increased by 2%, suggesting that the “unretirement” concept is gaining popularity. Almost a quarter of workers over 65 are self-employed versus only about 10% of those under forty, which indicates that many who are working in retirement are continuing to operate their own businesses as opposed to working for another company.1

If you’re trying to decide whether to continue working or to return to the workforce during retirement you should check out these pros and cons to help you to make an informed decision whether “unretirement” is for you.

Pros of working in retirement years

  • Social security benefits are typically enhanced the longer you work, (although there can be some tax implications to consider). You will likely receive an increase of 5-8% in Social Security benefits for each year that you continue to work before collecting benefits.
    Social security is also based on your 35 highest earning years, and since most workers make their highest salaries closer to retirement, you may also see a bump in benefits from extending your work during higher earning years.
  • Depending on the number of employees your employer has on the payroll, they may be able to allow you to continue with your health insurance plan, which could be beneficial to you. Keep in mind that part-time workers may be subject to work minimum number of hours to maintain coverage, and in some cases your private health insurance could become secondary to Medicare.
  • Many continue to work in retirement years regardless of the possible financial benefits. They choose to work simply because they enjoy a sense of purpose and engagement that is achieved by contributing and feeling needed.
  • Improved health and longevity are two compelling reasons to stay in the work force. Studies have shown that people who work in jobs that are high quality, high reward tend to live longer and healthier lives. That doesn’t mean it is the right choice for everyone, however, it does make the option worth exploring.

Potential downsides of working during your retirement

  • While your Social Security Benefits may increase the longer you work, depending on your situation, you may also find that you will have to pay higher taxes on the benefits you receive.
  • A higher income can also require you to pay a higher premium for your Medicare
  • The additional income you make while working in retirement can also increase your tax bracket which could affect the taxes you will be required to pay on any pensions or 401k disbursements.
  • Working during retirement years may create a strain on your relationship (especially if your partner isn’t working), and it could take much of your free-time that you deserve to enjoy after having worked so hard for so many years.

Weigh the pros and cons

When making the decision about whether to continue to work in retirement, you need to examine the pros and cons carefully and honestly. You may think you do not have enough money to retire, especially as costs are rising, but you may be surprised to find that your years of diligent saving have actually paid off. If you examine your budget closely, you may find that you do not need as much income as you think you do, or you may discover ways that you can cut costs without sacrificing your quality of life.

You also need to prioritize your health and wellness. You may think you’re up to the task of remaining in the workforce, but your body may say otherwise. Perhaps your days are better spent with family, friends, and hobbies that you enjoy. It’s okay to step off the “workforce express” and take time for yourself.

Whether you decide to keep working or fully retire, the choice is yours to make. Let us help you navigate the decision so that you can be confident you are doing what works best for you and your loved ones.

It’s as easy as talking to a Bankers Life agent and exploring your options. We can answer questions and help create financial plans. Click here to get started.


1As the pandemic continues, more older adults are working – what’s tempting them? https://www.magnifymoney.com/news/working-older-adults-study/, August 13, 2022.

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Insurers and their representatives are not permitted by law to offer tax or legal advice. The general and educational information here supports the sales, marketing or service of insurance policies. Based upon individuals’ particular circumstances and objectives, they should seek specific advice from their own qualified and duly-licensed independent tax or legal advisors.