Retirement Is Unretirement Your Next Career Move?

by Rebecca Lake | March 30, 2023

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 the numbers of retirees re-entering the workforce is on the rise; according to a recent survey, as of March 2022, 3.2% of workers who were retired a year earlier are now employed. 

Why? The desire to go back to work may come from a number of reasons: to feel connected to others, to remain active or pocket additional income, for example — or a combination of those factors. To help you figure out whether unretirement is right for you, we asked un-retirees and experts to share their advice and experiences.

Taking stock of circumstances

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 at 54 years old. She had intended to look for new work ("I personally have never believed in retiring,” Panagakos says) but ended up putting her plans on hold to accommodate a move. Six months into her retirement a former colleague invited Panagakos to join her New York-based boutique career-coaching firm, and she accepted.

"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.”

Before you unretire, it helps to have a strong sense of why you may want to make this move. Is it to stay relevant and continue using your skills? A wish to help others? A need to increase your income? An interest in starting a business or non-profit, or becoming a mentor or a volunteer?

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

I was primarily driven by a desire to be intellectually stimulated and constantly learning.
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Easing into unretirement

Some people make the shift gradually. Sam Beasley, who retired at age 51, is one of them: After realizing he was too young and energetic to spend all his time puttering around the house, he began volunteering, and ultimately found his calling as a speaker, consultant and author. These days, Beasley and his wife run several businesses in California and Washington, and he also teaches seminars on financial and emotional well-being.

For a life change like this, communication as a couple is key. 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? It’s a good idea to determine how will you set boundaries so that your work doesn’t infringe on your personal time.

grandfather playing soccer with his grandkids

Focusing on financials

Unretiring to continue your career pursuits — either as an entrepreneur, employee or gig worker — can carry strong economic incentives. "Working well into the traditional retirement years is a good way to relieve financial stress," says Chris Farrell, author of "Purpose and a Paycheck," a guide to finding personal and financial fulfillment later in life. "Paid work turns the traditional three-legged stool of retirement — Social Security, employer-sponsored retirement and personal savings — into a sturdier four-legged stool."

In weighing your options, it’s useful to evaluate 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. If you're unretiring early, taking money from a 401(k) or IRA before age 59 1/2 could trigger a 10% early withdrawal penalty, for example, and you'll also owe income tax on the withdrawal. If you're tapping a taxable brokerage account instead, you’ll pay capital gains tax. 

Working well into the traditional retirement years is a good way to relieve financial stress.
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Keep in mind that the earliest you can receive Social Security benefits is age 62, and benefits 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.

Another consideration: How will returning to, or staying in, the workforce longer impact 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, and an advantage is that interest-earning funds can compound longer. Additionally, "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, 65-year-olds today will live an average of about 18 to 20 more years.

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. You may feel market losses more keenly 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 it when the moment arrives.

older man working in a wood shop

Developing an exit strategy

If you do unretire, there’s a good chance you’ll eventually want to shift gears again and enjoy a full farewell to your working life. It’s helpful to work with a financial planner to firm up when you'll officially retire, what you'll spend your time doing afterward and how you'll manage your finances moving forward. Be realistic about your time frame and ability to adjust as you go from one life stage to another, Farrell suggests, and "run through various 'what if' scenarios to see the potential financial consequences of what you're thinking about doing next.”


— With additional reporting from Life and Money by Citi editors

Rebecca Lake

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