Retirement Is Unretirement Your Next Career Move?

by Rebecca Lake | April 09, 2019

Many of us go through our working lives buying into the idea that retirement means permanently punching out from a career and heading off into the sunset (preferably poolside).

The reality, however, is that 39% of workers aged 65 and older have chosen to unretire — that is, to retire and then return to the workforce, according to RAND's American Working Conditions Survey.

The desire to work may continue to hold sway for a number of reasons: to feel connected to others, to remain active, to pocket additional income or a combination of those factors. You can still carve out beach time at an island hideaway — just be sure to use your vacation days.

So, how can you determine if unretirement is right for you?

Define the ‘why’ of unretirement for you

Judy Panagakos worked in human resources at a job she thought she'd hold for the duration of her career, before an unexpected layoff led to an early retirement in 2017 when she was 54 years old.

"I personally have never believed in retiring,” Panagakos says.

Following the layoff, she intended to look for new work, but put her plans on hold to accommodate a move. So, when a former colleague invited Panagakos to join her New York-based boutique career-coaching firm six months later, she immediately said yes.

"I was primarily driven by a desire to be intellectually stimulated and constantly learning," she says. "It's an amazing opportunity because I'm helping people, and that's what originally drew me to human resources.”

Consider why you want to unretire. Is it to stay relevant and continue using your skills? A desire to help others? To increase your income? Drive to start a business or non-profit? Be a mentor or a volunteer?

Putting your unretirement goals and purpose into words can be clarifying and, should you decide to move forward, help you hone your plan.

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Putting your unretirement goals and purpose into words can...help you hone your plan.
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Seek balance

Time is a precious commodity, so it's important to consider how you'll use yours as an unretiree. The key is balance.

Those who've reached traditional retirement age generally embrace a portfolio of activities, "including paid work, volunteering, grandparenting and leisure," says Chris Farrell, author of Purpose and a Paycheck, a guide to finding personal and financial fulfillment later in life.

In Sam Beasley's case, he and his wife are managing their new work-life balance by pursuing unretirement together.

Beasley, now 68, retired at age 51, but quickly realized he was too young and energetic to spend all his time puttering around the house. He initially started off volunteering before finding his calling as a speaker, consultant and author. Now Beasley and his wife run several businesses in California and Washington, while he also teaches seminars on financial and emotional well-being.

They follow a simple rule: If it isn't fun, don't do it.

Talk with your partner about each other’s expectations for unretirement. Do you want to spend time with your children or grandchildren? Fit travel and new hobbies into your lifestyle? Determine how will you set the sort of boundaries that ensure your professional activities don't infringe on your personal time.

grandfather playing soccer with his grandkids

Focus on financials

Unretiring to continue your career pursuits — either as an entrepreneur, employee or gig worker — can carry strong financial incentives.

"Working well into the traditional retirement years is a good way to relieve financial stress," Farrell says — especially if you're concerned about money issues late in life. "Paid work turns the traditional three-legged stool of retirement — comprised of Social Security, employer-sponsored retirement and personal savings — into a sturdier four-legged stool."

In planning for unretirement, it’s important to take into account your various sources of retirement income:

Consider how much you'll be able to draw down from these accounts to meet your expenses without risking expending your savings or increasing your tax bill.

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Working well into the traditional retirement years is a good way to relieve financial stress.
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If you're unretiring early, for example, taking money from a 401(k) or IRA before age 59 1/2 could trigger a 10% early withdrawal penalty. Further, you'll owe income tax on the withdrawal. If you're tapping a taxable brokerage account instead, you’ll pay capital gains tax. 

The earliest you can take Social Security benefits is age 62. Benefits, however, are reduced when tapped prior to reaching your full retirement age. You'll need to be sure your unretirement income is enough to allow you to delay taking withdrawals from savings or receiving Social Security.

Additionally, consider how returning to or staying in the workforce longer impacts your ability to continue saving on a tax-advantaged basis.

"Continuing to earn an income allows you to add to your retirement savings," Farrell says. The advantage? Interest-earning funds can compound longer. Plus, "You're supporting yourself off the income generated by your savings for a shorter period."

With Americans' life expectancies on the rise, that's good news. According to the Social Security Administration, one in four 65-year-olds today will live past age 90; one in 10 will surpass age 95.

Life expectancy may also influence how you approach your asset allocation. "Working longer allows you to take a bit more risk with your portfolio," Farrell says. According to Farrell's view, "With an income still coming into the household, you have somewhat greater risk capacity than the person who is living solely off their accumulated savings."

Remember, your appetite for taking that risk will likely change over time. Market losses may be more keenly felt if you're holding a larger portion of your portfolio in stocks versus bonds or if you're approaching the end of your unretirement.

Finally, providing yourself as much time as possible to plan for unretirement can help ensure you're financially and emotionally equipped for that adventure when the moment arrives.

older man working in a wood shop

Develop an exit strategy

So how long will your unretirement last?

Panagakos says she has no plans to retire permanently. Neither does Beasley. You, on the other hand, may want to eventually shift gears and enjoy a full farewell to your working life.

That requires a plan of its own that defines when you'll officially retire, what you'll spend your time doing afterward, and
how you'll manage your finances moving forward.

Don’t hesitate to work with a financial planner as you get ready to execute your true retirement plan. "Run through various 'what if' scenarios to see the potential financial consequences of what you're thinking about doing next," Farrell says. And be realistic about your time frame and ability to adjust as you go from one life stage to another. "Transitions,” he says, “always take longer than we think they will."

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Don’t hesitate to work with a financial planner as you get ready to execute your true retirement plan.
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Your Golden Years are exactly that: Yours. So don’t settle. It’s your prerogative to create a retirement that best fits your unique mix of goals, needs and resources. And if that means seizing an opportunity to return to the workforce? Well, with a bit of careful planning and some expert advice you should feel free and empowered to do just that.

Career Planning Retirement Planning
Rebecca Lake

has a vision for unretirement that includes exploring an encore career as a teacher and author.

The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article.