July 17, 2023

We know the Federal Reserve has been raising interest rates to get inflation under control. One result of these efforts is that many older Americans are unretiring due to inflation and worsening financial positions.

According to a recent survey by Paychex, 55% of retirees who went back to work in the last year said they did so because they needed more money. Also, one in six retirees is now considering returning to work after being retired for several years.

Over time, the number of older adults in the workforce has been growing. Among adults aged 65-74, the workforce participation rate was 25.8% in 2021. By 2031, that share is expected to grow to 30.7%. In the 75-and-older-crowd, the portion still working was 8.6% in 2021. It’s expected to reach 11.1% by 2031.

Of course, people are also returning to work for reasons other than needing more cash. Chief among them is that we’re living longer, healthier lives today, so we can work longer. Another is many retirees report they are bored in retirement – more than half of the respondents to the survey said they were bored or feeling lonely in retirement (we are a social species, remember).

But it’s not surprising to me that needing more money is the main driver of retirees returning to work. Once prices rise, they rarely retreat. Thus, as the statistics suggest, many older Americans are probably going to remain the workforce longer than they used to.