What retirement looks like may vary for people but it generally means taking a step back from their working life. However, for many retirees the reality is very different as they are spending their retirement days working, a T. Rowe Price report found.

Key Takeaways

  • One in five retirees is working at least part-time in their retirement, according to a T. Rowe Price study.
  • Close to half of retirees who are working credit financial reasons, though almost as many cite social and emotional benefits. 
  • More than half of U.S. workers say they intend to continue working in their retirement, according to a survey by the Transamerica Center for Retirement Studies.

One in five retirees (20%) is going back to work, and an additional 7% are looking for work, the study found. For retirees going back to work, financial and health-related benefits motivate their decisions, though the line between the two reasons may not be as clear as one might imagine.

Why Retirees Are Going Back to Work

People “unretiring” could in part be due to the high rates of retirement seen during the pandemic, the report explained. The pandemic caused 2.4 million excess retirements, in which people retired, even if they didn’t previously intend to, according to Federal Reserve Bank of St. Louis research.

For some, the return to work is driven by financial need. Close to half or 48% of retirees T. Rowe Price surveyed who are working credited financial reasons, though almost as many at 45% cited social and emotional benefits they receive from employment. 

Most retirees said they don’t need to work, but a portion work out of necessity or preference. Sixty percent indicated they don’t need to work, while 12% can’t, compared with 10% who have to work and 18% who want to work, the study said.

Most American Workers Intend to Work in Retirement

Among those currently working in the U.S., more than half (55%) expect to continue working in their retirement, a recent survey by the Transamerica Center for Retirement Studies found. 

Of those planning to work during retirement, 80% cited health-related reasoning while 78% credited financial drivers. The most common healthy aging concerns are being active, at 50%, and wanting to keep their brains alert, at 42%. 

The biggest financial driver is simply wanting an income, according to 52% of workers in the study.

Finances Drive Retirees’ Decision to Work More Than Health-Related Reasons

Finances may play a bigger role in people’s decision to work in retirement than they realize, Shawn Stone, a Retirement Planning Counselor (CRPC) and Director of Advisory Services at Retirement Planners of America, told Investopedia.

Retirees who struggle to maintain the standard of living that they want in retirement may be more eager to go back to work, even if they credit the decision to healthy aging. 

“You’ve got to dig into the psychology of it with [clients],” Stone said. “It may not be as much of the ‘I just want to stay active.’ It’s, ‘you told me I can’t afford to spend $10,000 a year on a travel budget. I’m gonna go make that money so we can do the trip.’”

Stone said that when preparing for retirement, clients are often worried about the “fun stuff” like travel and hobbies to stave off boredom, but once they actually retire those concerns shift. 

“Once they get to retirement, then the rubber meets the road and they’re kind of starting to think about the health-care costs, taxes, inflation, all those other basics, but it just seems like people are going into retirement with more euphoria than they should have,” Stone said.

Inflation Leads Retirement Planning Concerns

When asked what their biggest worries are in planning for retirement, financial challenges pulled ahead of health worries, with over half of U.S.-based respondents surveyed by HSBC citing inflation. 

More than half at 54% said they worry about inflation devaluing their retirement savings. Other concerns driven by finances include higher health-care costs and worries about saving enough for a comfortable retirement.


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