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5 Unexpected Reasons Retirees Are Returning to Work

Inflation, stock market volatility and other life events change the retirement equation

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COVID-19 drove millions of older adults to retire, but inflation and other unexpected life events are causing them to return to the workforce. According to the job search website Indeed, of those who were retired a year earlier, 1.7 million, or 3.3 percent, are employed again. The majority of these so-called unretirees are working part time.​

Nobody goes into retirement expecting to come back into the workforce. But there are a lot of unforeseen reasons why that can happen, including the following.


At last check, inflation was running at an annual rate of 8.3 percent, the highest since 1981. That’s sending prices soaring for everything from food to gas. As of April, food prices were 10.8 percent higher year-over-year. Inflation causes pain for everyone, but it’s particularly brutal for retirees on a fixed incomes. “The purchasing power of retirement savings is eroding every single month,” says Sinem Buber, lead economist at ZipRecruiter. “This is quite new for them, and it’s scary.”

To quantify just how hard inflation can be on retirement savings, consider this calculation. One percent inflation over 20 years, based on a $1,341 monthly income, will result in a $34,406 cumulative loss of buying power, according to modeling conducted in 2016 by LIMRA, an insurance industry trade association. If you use the same methodology to calculate the impact of 8.3 percent inflation, the shortfall jumps to over $400,000, says Buber. “This is as high as the median house price right now,” she says. To cover the rising costs of everyday expenses, retirees are going back to work.

Stock market volatility

During the pandemic, the stock market soared as people flush with cash and sitting at home poured money into stocks, bonds and other asset classes. Retirement accounts saw a nice uptick, prompting many people to pull the trigger and exit the workforce. What a difference a year makes. Since the start of 2022, the stock market has been in a decline amid rising interest rates and soaring inflation. That’s spooking some retirees, who are seeing their 401(k) balances plummet. “When you look at your monthly statement month-over-month, and the stock market has decreased since the beginning of 2022, you’re not feeling super comfortable about your financial situation,” says Buber. “These people who are retired are the same people who lost a substantial share of their retirement savings back in 2008, and they barely recovered.” They have started recalling those bad memories and thinking, maybe I need to work for a couple of more years to recover what was lost, she says..

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Changing work landscape

Prior to the pandemic, most people went to the office daily. That all changed when COVID-19 shutdowns forced companies to embrace remote workforces. Now, to get the job done, employees of all ages and skills had to learn how to log on to Zoom, send a message through Slack, or otherwise embrace technology. For people in retirement, that changed the equation. Suddenly they could earn a living without leaving their homes. They didn’t have to worry about catching COVID-19 or mustering the energy to commute every day. “A lot of folks nearing retirement decided during the pandemic to go ahead and retire and take it easy,” says Andrew Meadows, senior vice president at Ubiquity Retirement + Savings. “They didn’t realize on the other side of this how much work has changed. It is very different than it was pre-pandemic. What that does is open up a lot of opportunities for seniors.”

You need health insurance coverage

As of April, the cost of medical care services was up 3.5 percent in the past year, and while that’s not as much as overall inflation, retirees in particular are feeling the pinch. According to Buber, the average cost of health care for an older person is about three times what it is for a young working adult. If younger people are paying $500 for health care, older adults are paying $1,500. To subsidize some of that increased burden, retirees, especially younger retirees who are not yet eligible for Medicare, are returning to jobs that provide health care coverage. “The biggest share of their monthly income is to cover health care costs,” says Buber. “They were a high-risk group during the pandemic. Of course they want health insurance, and given the cost, they want to have a job that covers the increase.”

You’re lonely

Loneliness among older adults, already a significant problem in this country, was made worse by the pandemic. As it stands, about one-third of U.S. adults age 45-plus report feeling lonely, and those in low income brackets are particularly vulnerable. Not only can loneliness impact your mental state, studies show it’s just as bad for your physical health as being overweight or smoking. For retirees, a way to overcome loneliness is to return to work. “We have a real serious issue in this country of senior loneliness and depression. The pandemic really exacerbated that,” says Meadows. “During the pandemic, many seniors were forced to stay at home, and now they are thinking of entering the workforce again for social interactions.”

Donna Fuscaldo is a contributing writer and editor focusing on personal finance and health. She has spent over two decades writing and covering news for several national publications including the Wall Street Journal, Forbes, Investopedia and HerMoney.