The Great Unretirement

A key lesson we seem to be learning right now, as a collective, is to never plan for the expected. Millennials and now Gen Z have come of age in an economy where traditional norms seem to be disappearing by the day and replaced by constant change.

One of the norms that seems to be under construction currently is the concept of retirement. Baby Boomers are entering retirement in record numbers, but at the same time, they are also re-entering the workforce as swiftly as they left it. Keep reading to learn about the phenomenon labeled as 'The Great Unretirement' that may permanently redefine what our futures may look like.

What is the Great Retirement?

The Baby Boomer generation, those born between 1946 and 1964, constitute 28% of the U.S. population and are currently in the midst of a period known as "The Great Retirement".

Pew Research Center data predicts that by the year 2030, approximately 75 million Baby Boomers will have retired. The pace of this retirement wave is quickening: in 2020 alone, close to 30 million Baby Boomers retired, a staggering increase of 213% compared to the number of retirees in 2019.

What is the Great Unretirement?

So, here's the paradox: a massive wave of Americans are retiring, but simultaneously, we are also experiencing a phenomenon being called the "Great Unretirement."

The 'Great Unretirement' is a distinctive shift in the workforce where an unprecedented number of retirees, particularly those from the Baby Boomer generation, are returning to work. In other words, they are "unretiring."

This phenomenon is driven by a mix of different factors including increased longevity, financial necessity, and the desire to stay mentally and physically active. It's not just a trend, but an economic force that is significantly reshaping our society and economy.

This demographic shift is indeed playing a significant role in sustaining economic growth. The participation of older adults in the workforce not only alleviates the strain on social security and retirement funds, but also provides a wealth of skills and experience that contribute to business growth and innovation. Despite the positives, there are also potential downsides. The rise in older adults in the workforce may lead to increased competition for jobs, potentially making it harder for younger generations to secure employment or advance in their careers.

Why "Unretiring" Is Gaining Popularity

According to Forbes, nearly two-thirds of recent retirees would consider returning to their jobs. There are several reasons why retirees are having a change of heart and making a comeback to the workplace:

1. Financial Realities: A significant factor driving the trend towards unretirement is financial constraints. Many retirees are finding that their accumulated savings and retirement funds do not sufficiently cover the escalating costs of healthcare and living expenses. This financial shortfall prompts them to re-enter the workforce for supplementary income.

2. Longer Life Expectancy: As medical advancements continue to extend the average life expectancy, retiree's financial resources must also stretch further. This means that retirees may need to plan for a longer retirement period than previous generations did. The prospect of extended years without a steady income can be daunting for many retirees, leading them to consider going back to work.

3. Intellectual Engagement: Many retirees find that they miss the intellectual stimulation and social interaction that comes with working. After years of a structured work routine, retirement can feel empty and unfulfilling for some individuals. Returning to the workforce allows them to continue learning and growing, both personally and professionally.

4. Health Benefits: In addition to providing a source of income, re-entering the workforce can also provide access to employer-sponsored health benefits. This is especially important for retirees who may not have access to affordable healthcare options outside of their employer's benefits package. These benefits can help alleviate some of the financial burden that comes with aging and potential medical expenses.

5. Social Security Benefits: For retirees who have elected to receive Social Security benefits, returning to work may impact the amount they receive. Depending on their age and income level, a portion of their benefits may be subject to taxation. It is important for individuals to understand how continued employment can affect their Social Security benefits and plan accordingly.

6. Life Purpose: While financial considerations may be the primary reason for returning to work during unretirement, many individuals also find a sense of purpose and fulfillment in their continued employment. Retirement does not necessarily mean the end of one's career or contributions to society. By staying engaged in the workforce, retirees can continue to make a positive impact and feel a sense of purpose.

7. Social Interaction & Structure: Working during unretirement also provides the opportunity for social interaction and a structured routine, which can be beneficial for mental and emotional well-being. Retirement can often lead to feelings of isolation and loss of structure, but re-entering the workforce allows retirees to connect with others and maintain a sense of purpose in their daily lives.

8. Flexible Work Arrangements: As more individuals enter the workforce during unretirement, companies are adapting to meet their needs. Many employers offer flexible work arrangements such as part-time hours or remote work options, allowing retirees to balance work with other commitments and interests. This can be especially beneficial for those who may have health concerns or caregiving responsibilities.

Benefits of (Re)Hiring Retirees

Retirees bring a wealth of knowledge, experience, and maturity to the workplace, making them valuable assets for any organization. They often possess critical skills and industry insights gained over years of service, which can contribute significantly to business success. Furthermore, hiring retirees can help foster a diverse and inclusive workplace, promoting intergenerational collaboration and mutual learning.

To accommodate older workers effectively, organizations can adopt certain strategies. Flexible work hours and remote working opportunities can cater to retirees' needs and lifestyles, respecting their desire for a work-life balance. Job design can be adapted to suit their physical capabilities, such as offering desk-based roles or providing ergonomic workstations. Employers can also provide continued learning and development opportunities, acknowledging that retirees, like their younger counterparts, are keen to learn and evolve in their careers. By creating a supportive and understanding work environment, businesses can harness the potential of retirees in the workforce.

Retirement Myths to Think About

Until now, it was universally accepted, expected even, that adults should work into their 60's but no later. The Great Unretirement is challenging our society's notions about how adults should spend the latter third (or more) of their lifetimes.

Here are some myths surrounding life, work, retirement, and old age we should be thinking about:

Myth #1 - Life is Linear A widespread belief among many in the Baby Boomer generation suggests life comprises three core stages: education, establishing a career and family, and finally, retirement. However, life is far more flexible and unpredictable than this belief suggests. It's not unusual for individuals in their sixties and seventies to kickstart new careers or relationships. We shouldn't wait until after retirement to find peace and balance. Instead, we should embrace the uncertainty of life and live to our fullest expression today, and every day.

Myth #2 - Learning and Mastery Tapers Off Children naturally possess an insatiable curiosity that sometimes diminishes with age. Socially, there also seems to be a shared belief that education should be completed by a certain age. (Just look at the lack of age diversity in a university classroom, or even the need for the label, "non-traditionally aged student.")

However, our brains thrive on continual learning and stimulation, which are crucial for maintaining cognitive health and memory. It's never too late to dive into subjects that ignite your interest or learn new skills.

Myth #3 - Retirees are Way Past Their Prime Who wants to have an expiration date stamped on their forehead? Well, to be frank, society often assigns us with a "best by" date that doesn't accurately reflect our potential.

Experts have found that young people today are expected to live to be 100 years old. The traditional retirement age of 65 is getting younger and younger by these standards.

Retirees aren't past their prime at all, if anything, they may be the age group that is in their prime the most. Older adults who are thriving can offer wisdom and insights to the rest of us.

Myth #4 - Death is a Taboo Contemplating mortality can feel unsettling, but it serves as a profound reminder of the impermanence of life. This realization can help us eliminate trivial pursuits and focus on the elements of life that truly matter. In the words of Benedictine monks, "keep death daily before your eyes," to live a more fulfilled and detached life. With this in mind, we can all benefit from prioritizing our estate planning.

Retirement & Unretirement Put Estate Planning at Center Stage

So what does this all mean? If you aren't anywhere near the age of retirement, you may be wondering what you can learn from the Great Unretirement.

While this is a movement that is impacting Baby Boomers and work demographics today, this is also providing insight that work and retirement may be changing forever. The linear career model is already being challenged by new models where individuals don't identify with just one career, or their career at all. Many people are launching their own businesses and finding creative ways to make money. Perhaps we'll see a shift through which it will become mainstream for older adults to go back to school and launch entirely new ventures and careers after the age of 60.

Although the rest is still unwritten, we do know that the Great Unretirement is having a profound impact on financial and estate planning. This is something that we should all be thinking about. With retirees returning to work, planning for the future has become more complex. It's not just about saving for retirement anymore, but also about managing assets, income, and health care costs over longer life spans.

Put Your Trust & Will Estate Plan Into Place Today

Putting an estate plan into place can be a great way to obtain peace of mind in a world where norms are being challenged and what we once knew to be true is more uncertain. Regardless of your age, making your wishes known and protecting your assets through a Will and Trust can provide comfort and a sense of control.

Don't wait until retirement to start thinking about estate planning. Begin now, even if it means just having a simple Will in place. This will give you the foundation to build upon as your life changes and evolves. And with the changing landscape of work and retirement, it's more important than ever to have a solid estate plan.

If you are in retirement and are thinking about reentering the workforce, it's also a good time to revisit your estate plan. With new sources of income and potential changes in beneficiaries, updating your plan can ensure that your wishes are still accurately reflected.

As we navigate these changing times, Trust & Will is here to make the process of estate planning easy, affordable, and adaptable to your evolving needs. Whether you're starting a new chapter in the workforce or adapting to the 'Great Unretirement', we believe in empowering you to take control of your future. Our platform allows you to create, update, and manage your estate plan, ensuring your assets and your wishes are protected. So, don't delay. Embrace the new norms with confidence and peace of mind. Start planning with Trust & Will today and secure a future that reflects your journey, however unexpected it may be.

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