‘Retirement ideals’ have been changing for years, and the unretirement of older people is changing the shape of this life stage.
Imagine yourself retiring. This is a romantic photo of a couple drinking pia Coladas on a white sand beach before they take a skydive later. Their only responsibility is to get their grandchildren good birthday gifts. This beautiful fantasy remains just that: a fantasy for many retirees.
For a long time, the concept of retirement has been changing. Since the 1990s, the number of people working past retirement age has consistently grown. In 2017, 32% of Americans aged 65 to 69 were working, up from 22% in 1994. Between 1993 and 2018, employment rates for people older than 65 doubled in the UK.
Then came Covid-19. According to Michelle Silver, associate professor of gerontology at the University of Toronto Scarborough, society was already undergoing a shift in how it thinks about retirement. Nevertheless, the pandemic has exacerbated the situation.
In the wake of the pandemic, labor trends changed. In the UK, at least 250,000 50- to 64-year-olds left the workforce, while over 3 million Americans retired early.
As inflation spikes, however, more people are returning to work. Indeed reports that unretirement levels are 3.3% in the US, well above the sub-3% average since 2017. There was a spike in 55-to-64-year-olds ‘urgently’ seeking work in the UK, and two-thirds of those who retired during the pandemic expected to remain in the workforce.
As people live longer, they expect and need to work beyond traditional retirement ages. Perhaps permanently changing our perception of what this life stage will look like.
It is clear that concerns related to the cost of living are a significant motivator behind retirees’ return to work. Among the over-50s who returned to work during the pandemic, 48% said they needed money, while 23% said they couldn’t afford to retire.
During a pandemic, retirees’ positions change dramatically. Initially, they were leaving the workforce in droves, partly due to fears linked to Covid-19 but also an increase in house prices and investments.
Due to inflation, people don’t feel as comfortable as they did a year ago. The current inflation for this year alone is 8.52%, and most retired people live on fixed incomes, seeing their savings decrease and prices continue to rise. The high inflation rate is making people consider going back to work.
Many retirees are on board with unretirement in the US, where unemployment has been at its lowest level since the 1960s. Some retirees have skills that are in need and will have an easy time finding reemployments. Others might face a more difficult challenge in securing high-paying jobs as technology might factor into the skills that retirees have.
Flexible retirement
In addition to returning to full-time employment, some retirees seek more flexible work arrangements. In the UK, 69% of those 50-to-70-year-olds who left the workforce during the pandemic intend to work part-time.
Retirement unhappiness is well documented. For those whose personal and professional identities are intertwined, retirement can be an incredibly dissatisfying experience. Many people could experience a preview of retirement during the pandemic – being with their partner all day, or being alone all day, without traditional work structures – and found the lifestyle did not suit them.
As flexible work practices become more prevalent, it’s becoming much easier to continue to work from retirement settings – as Annie Llewellyn discovered. Following a career as a university lecturer, she retired ten years ago, according to her. After realizing she didn’t have enough money to support herself, she began doing freelance work, such as marking papers and giving lectures.
In the wake of the pandemic, more flexible working practices have been adopted, which has made it easier for Llewellyn to maintain her unretired lifestyle.
It may no longer be necessary for older workers to work beyond retirement if current cost-of-living concerns ease. As we live longer and work harder, we are not saving enough for retirement, suggesting that ‘retirement,’ in some form, will include some work.
With the shift to flexible work, today’s retirees could benefit as well as the next generation that will not be able to afford to retire. In the past, the wealth gap between boomers and later generations might have meant many people working well into their 70s.
However, flexible work offers a new option – a different take on beachy retirement. Even though this flexible version of retirement won’t be available to everyone, it illustrates how the concept can and should evolve.