Why baby boomers are choosing to 'unretire' and head back to work

Employees spend their entire careers setting themselves up for a successful retirement, where they can live comfortably and happily without ever having to think about work again. But closing the door on a decades-long career is not so simple for some. 

Currently, 11% of retirement-aged seniors are employed, according to a recent survey from ResumeBuilder, and another 11% are working part-time. Of that group, 61% have yet to retire, but 39% have already retired and have then returned to the workforce in a trend that is rapidly gaining momentum, known as "unretirement." 

"A lot of people want to retire because they're burnt out, overwhelmed and they have too much work on their plate that they don't want to do," says Jennifer Barnes, CEO of Optima Office. "But if you are able to get a position where you're only doing the things that you love and where you're providing value, then that makes work exciting again."

Read more: Are you giving your employees bad retirement advice?

Burnout isn't the only thing pushing seniors back to the workforce. According to Resume Builder's report, 51% of retirees returned to work because of an increasing cost of living, with 37% reporting insufficient retirement savings. Many of those "unretirements" are a consequence of the pandemic, which forced 2.4 employees to retire before they were ready, according to research from the Federal Reserve of St. Louis. As a result, pushing retirement back several years became a sustainable solution.

For example, a 62-year-old employee with an income of $100,000 and approximately $900,000 set aside for retirement, with annual expenses of $63,000, has a 68% chance of having enough income to last, based on projections generated by a Retirement Income Calculator from investment management company T. Rowe Price. Yet delaying retirement just three additional years would raise their chances of having lifetime income to 91%, providing additional financial padding.

Seeing as the average income is closer to $60,000 a year, according to data from the Bureau of Labor Statistics, pushing retirement later, or returning to work again, has become a financial necessity.  

"Retirement right now just isn't going as far as it could be due to inflation, less profitable investments and other challenges in life," Barnes says. "It has made retirees realize that they can and they want to work a little more and earn a little more income." 

Read more: Here's how much millennials and baby boomers want to save this year

Behind finances, the loss of community and routine is another major driver behind unretirement. In fact, 45% of retirees that returned to work did so for social and emotional benefits, according to data from T. Rowe Price. For many, retirement turns out to be pretty boring, Barnes says.

"People have this big, grandiose dream of retiring and never having to work again and yet three months into retirement they realize they don't like all the extra free time they have," she says. "They just want to be important again."

But retirees aren't willing to clock into the rigorous work schedules they had before, Barnes says. Time away from their careers means retirees are uninterested in their 40-hour weeks and demanding routines, with most former retirees favoring part-time work. And that set-up doesn't just benefit the returning employee — it's beneficial for the employer too, who will be gaining employees with years of experience and valuable industry knowledge.

At Optima, Barnes says the company has always incorporated retirees into their existing philosophy around flexible schedules. While it often entails more logistics and an administrative effort, the payout is more than worth it. 

Read more: Half of Gen X has done no retirement planning, study says

"There's more people to deal with, therefore more schedules, and you have to understand where people live, what their software experience is and how many hours a week they can dedicate [to work]," she says. "But we also have higher retention because our people are happier and they stay with us a long time." 

Optima and other organizations embracing "unretirees" are moving the needle on what work looks like for older generations. According to Resume Genius's findings, when seniors were asked when they plan to retire, 6% indicated they plan to retire next year, while 25% are waiting three years, and 38% plan to stick it out for five or more years. This means that, at least for the foreseeable future, senior employees will stay an active part of the workforce. 

"They handle everything they need to handle, they're dedicated and they're loyal," Barnes says. "And they do a great job because they're grateful for the opportunity to work for a company with flexibility while still being able to do their chosen career."