Changes have been aplenty since the COVID-19 pandemic arrived. And now, a new trend is emerging, as Americans are beginning to “unretire” and return to the workplace.
A new study from MagnifyMoney finds that the majority of states are seeing Americans unretire and the proportion of working adults 65 and older is rising.
The percentage of individuals 65 and older who say they are working jumped from 19.5% in 2020 to 21.9% in 2022. However, the number of U.S. adults who say they are retired has also risen from 14.9% to 17.4%.
In a state-by-state analysis, New Jersey saw the largest percentage rise in adults 65 and up working in the past two years, going from 18.1% in 2020 to 37% in 2022. Conversely, North Dakota saw the percentage of older workers dropping from 36% down to 25%.
The report cites the “Great Resignation” as a contributing factor as many Americans have taken advantage of the competitive job market which can include higher wages, sign-on bonuses, and more options for job hunters, including former retirees.
“There are many reasons Americans 65 and older are staying in the workforce–or returning to it,” says Ismat Mangla, executive editor of MagnifyMoney.com. “As inflation–and thus cost of living–rises and 401k accounts lose value during stock market dips, some older Americans simply need to work to stay afloat.”
Who these older Americans are working for is also changing. The report shows that government jobs are seeing a large drop. The percentage of 65 and up government employees dropped from 15.2% to 10.1% between Q2 2020 and 2022. Further, a recent study from Empower found that government employees are facing a number of retirement savings challenges. Citing the pandemic and economic uncertainty, the study found that saving for retirement is a top financial priority for 2022 for state and local government workers. Analyzing the savings behavior of 1.55 million active state and local defined contribution (DC) participants, the government employees steadily increased retirement savings during the pandemic compared to two years ago. The group is saving an average of 6.4% of their salary in their workplace retirement plan, up from 5.9% in 2020.
The MagnifyMoney study also showed that Americans prefer to work for themselves. More than 25% of employed older Americans are self-employed, which is more than three times the rate of those between the ages of 25 and 39.
“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,” noted Mangla.
Lynn Brackpool Giles is a contributing editor to 401(k) Specialist. Giles is a former Managing Director of Communications and Consumer Services for the Financial Planning Association (FPA), where she oversaw all corporate, legislative, and consumer communications. In her current journalistic practice, she is a frequent contributor to numerous financial services industry publications.
