Jun 3, 2024
Retirement may no longer be a time to kick your feet up and relax. Instead, a growing number of seniors may find themselves back in the working world after they thought they were done
A survey of U.S. seniors between the ages of 62-85 by Indeed Flex has revealed that almost a third of retirees are considering doing between one and three shifts of temporary work per week.
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Meanwhile, 42% of working seniors, who have never retired, are thinking of adding temporary work to their full-time jobs.
So, why are so many seniors eager to collect a paycheck from an employer? There are few factors driving this un-retirement trend.
Indeed Flex said some of the reasons seniors are considering temporary work are personal fulfillment, desire for social interaction and healthcare benefits.
But there's one major financial issue prompting retirees to head back into the workforce: inflation. A fifth of the seniors polled by the temporary staffing platform have already returned to work due to the rise of cost of living.
"Temporary employment can serve as a sustainable and long-term source of extra income," said Novo Constare, CEO and co-founder of Indeed Flex.
Rising cost-of-living has seniors eager for some extra help
Price increases have occurred at a record pace in recent years. The average rate of inflation was 4.1% in 2023, 8% in 2022, and 4.7% in 2021. While Social Security cost-of-living adjustments (COLAs) are supposed to shield seniors against these increases and ensure they don't lose buying power, those COLAs aren't helpful for protecting the value of retirees' savings and investment accounts outside of Social Security.
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Data from the Senior Citizens League suggests even COLAs fall short of maintaining the spending power of Social Security benefits. The study says Social Security benefits have lost an estimated 36% of buying power since 2000. Its authors argue this is because the Consumer Price Index used to adjust Social Security benefits is the one for urban wage earners and clerical workers. Between January 2000 and February 2023, Social Security COLAs increased benefits by 78%, but the cost of goods and services purchased by typical retirees rose by 141.4%.
As the real value of their Social Security benefits and retirement plans decline, seniors have little choice but to look for other income sources, especially as many had too little saved to start. Vanguard revealed the median balance in its defined contribution plans among those 65 and over was just $70,620 in 2022.
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What can seniors do to fix their money woes?
For many retirees, going back to work in some form is going to be their best and only move. If you have little savings and your Social Security benefits don't stretch far enough, you're better off getting a paycheck than spending down your investment accounts and ending up with nothing in the bank later in retirement when working becomes more difficult.
Tutoring, consulting, pet sitting, and food delivery are among the side hustles that may be ideal for seniors who have knowledge or free time to bring to the table. Apps make it easier than ever to find flexible work on your schedule, or you can reach back out to old bosses and coworkers to see if there are part-time opportunities in your old field. A growing number of companies have embraced flexible or remote work, so you may not even need to leave home to do it.
Other options for those who can't or don't want to unretire could include moving to a cheaper area to live, opting for a more aggressive investment mix in your portfolio (although that carries additional risk) or downsizing and unlocking home equity to lower housing cost and bulk up your savings account, although that may prove to be difficult.
The important thing is to take swift action if you know your accounts are at risk of running dry, as the longer you live beyond your means the harder it will be to have stable finances throughout the entirety of your retirement years.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
