Retirees are returning to the workforce to reap higher wages and keep up with record inflation, according to an analysis released by Magnify Money earlier this month.
“There are many reasons Americans 65 and older are staying in the workforce — or returning to it. As inflation — and thus cost of living — rises and 401(k) accounts lose value during stock market dips, some older Americans simply need to work to stay afloat,” said Ismat Mangla, executive editor of MagnifyMoney.com. “The pandemic and current economic conditions may have impacted their ability to retire comfortably. Other older Americans stay in the workforce or return to work because they enjoy being engaged and challenged.”
The consumer price index rose to 8.6% from May 2021 to May 2022, according to the Bureau of Labor Statistics. Older adults are among those feeling the worst of it, reported KHOU-11. Social Security constitutes at least 90% of the income for 10 million older Americans, and the average payment is slightly more than $1,600 a month, the media outlet reported. Further, KHOU reported, inflation is overtaking this year’s cost-of-living increase on those benefits, even though it marked the biggest raise in almost four decades. Rising healthcare costs also have dented many retirement accounts.
“That is just a burden that’s very difficult to bear for some of these people,” AARP Legislative Counsel and Legislative Policy Director David Certner told KHOU-11. “That’s when they have to make tough choices.”
Older adults can expect a near-record Social Security increase next year because of inflation, the media outlet reported.
“We find your average older adults often leaving $7,000 worth of assistance on the table,” Ramsey Alwin with the National Council on Aging told KHOU-11.
The solution, then, for many older adults is to “un-retire,” returning to the workforce now that the unemployment rate is below 4% and most companies are paying higher wages than they were before the pandemic, according to Magnify Money.
Among the key findings in the analysis:
- In May 2020, 19.5% of Americans aged 65 or more years were working. That percentage since has jumped to 21.9% in 2022. Meanwhile, the number of U.S. adults who say they are retired has also increased, from 14.9% to 17.4%.
- New Jersey saw the largest percentage increase in older adults working in the past two years. The percentage is up from 18.1% in May 2020 to 37% in May 2022.
- In North Dakota, the percentage of older adults working dropped, from 36% to 25%.
