Why Are So Many Retirees Going Back to Work?

It’s not unusual to hear people of working age complaining that they’ll never be able to retire. But for most of us, retirement is an option. However it’s also a reversible option. And it’s surprising how many people do reverse it, whether through choice or necessity.

Every retirement looks different and every return to work is a little different too, but there are some underlying reasons why many retirees are back in work not long after leaving it.

The Deceptive Attraction of FIRE

The FIRE (Financial Independence Retire Early) movement has been popular for many years now. It generally involves working hard, living frugally and saving and investing aggressively to build a nest egg at a very early age, often before hitting your 40th birthday.

FIRE is embodied in the type of motivational quotes that you’ll find all over the internet, along the lines of:

Do what 90% of people won’t do for ten years so you can do what 90% of people can’t for the rest of your life.

There are whole books now dedicated to the movement, such as Playing With Fire and Retire Before Mom and Dad.

But many commentators are starting to point out that there’s a big gap between what the FIRE movement promises its disciples and the cold hard realities of very early retirement.

Writer and researcher Alex Carter tracked 380 early retirees and found that over 80% of them returned to some kind of work within four years, often having ‘failed’ at FIRE, because frankly in the 2020s, the numbers no longer stack up. There are a few reasons for this.

• The cost of living is soaring, and many FIRE plans didn’t allow for inflation at this level.
• Aggressive investing strategies can be risky, and continuing this path in retirement (a time when those of traditional retirement age sensibly switch to more conservative investment strategies) doesn’t always pay off.
• Retiring at a very early age means you still have the expenses of a young, fit, adventurous person — you’re generally not going to be enjoying your low-cost hobbies and playing with your grandchildren.
• Traditional retirement plans — like the 4% rule — just don’t work for retirements that might last several decades, so FIRE plans can be full of miscalculations.

Many of the FIRE enthusiasts of the last few years hit their retirement goals, retired, and now have no choice financially but to go back to work.

The Social Pitfalls of Retirement

Another reason that many retirees (of any age) end up back in paid work  is the realisation that retirement, in the words of one retiree I spoke to recently, “just ain’t all that”.

If you’re tired of hard work it’s easy to assume that endless leisure is the answer, but endless leisure is not really what humans are designed for.

Most human beings need several things to feel truly fulfilled: a sense of purpose, the satisfaction of making a contribution to the world, a feeling that someone values what they’re doing, daily social interactions, and a challenge of some kind (mental, physical, creative, intellectual, or emotional).

All these things have, for many retirees, been closely linked with their working lives. And removing them is often not the Nirvana they imagined. They can be regained without paid work, of course. Perhaps through volunteering, family or community involvement, or creative hobbies.

But many find that some form of paid work — perhaps part-time, flexible, seasonal, and/or more enjoyable than what they did for their long-term career — makes them happier than traditional retirement, while also providing valuable extra income long into those later years when your financial pot is often shrinking.

The Pull of a Fresh Start

Linked to the point above, retirement can be a revelation for some. As one retiree once told me: “Turns out I didn’t hate work, I just hated my job.”

Retirement can last an awfully long time these days, with many of us living into our 80s, 90s or even 100s. It’s gone from being a few years at the end of life to a genuine “third act” where we have the possibility to reinvent ourselves, try something new, and find a job we actually like.

We’re generally freed from two things in retirement. The first is societal judgement. We can do something that’s not a profession, but a fun job. That’s because our identity is now “retired teacher” for example, so if we want to work part-time in a hardware store, a farm shop, or a garden center, why not? This is just something we do to keep busy. It’s not our whole personality anymore.

The second type of freedom is financial. Retirees may be feeling the cost of living squeeze, but they also invariably have a pension of some kind, or at least regular social security payments coming in.

While there’s no doubt that financial pressure is often a factor in the decision to return to work, the money is usually supplementing retirement income — however modest that might be — so there’s an opportunity to work a job you enjoy for less money.

Many retirees are becoming writers, artists, jewelry makers or potters. They’re taking a creative hobby or passion and turning it into a fresh start and, potentially, a successful business, or at least an extra income stream. It is perhaps a little sad they didn’t get to do this earlier, but maybe — with our longer lifespans and increased healthspans — that’s exactly what we should be using our third act for.

About the Author

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen