With dwindling retirement savings, older Americans are back on the job market
Dec 15, 2024, 12:02 PM GMT+2ShareSave
According to Business Insider
- More than 2,000 older Americans and counting shared their financial regrets with BI.
- Many said they had made mistakes that led them to return to work after retirement.
- This is part of an ongoing series about older Americans’ regrets.
After retiring less than a year ago, Sylvia, 64, is back at work.
The under $2,000 a month she receives in Social Security isn’t enough to pay her bills, and she has little retirement savings, so she recently started a job as a cashier.
Sylvia is one of many older adults who have shared their retirement stories with Business Insider in recent months. Some said they returned to work out of financial necessity; others unretired to stay active and combat loneliness. They’re among more than 2,000 Americans who have responded to a reader survey about their life regrets. This story is part of an ongoing series.
Sylvia, who requested to use only her first name for privacy, was hoping to land a part-time role in education or local government near Albany, New York. Though she has decades of experience and has submitted hundreds of applications, she’s had no luck getting hired in her field and opted to pick up shifts at the grocery store.
Now, Sylvia isn’t sure whether she will ever be able to stop working. She said she’s “mad” at herself for not building a strong financial foundation for retirement — she thought Social Security would be enough to get by. The manual labor of a grocery job is taking a toll on her mind and body, but she said she needs the money.
“I’m scanning groceries and I’m thinking: ‘I hold a master’s degree, I recently received an award from one of our state senators, and I can’t obtain professional work,’” Sylvia told BI. “Can you believe that?”
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Some older adults can’t retire because of their finances
Sylvia’s experience isn’t uncommon. The Federal Reserve Bank of St. Louis found that 2.4 million excess retirements occurred in the US as the pandemic began in 2020, meaning the number of retirees far surpassed the Fed’s prediction. However, an Indeed Hiring Lab analysis of individual-level Census data found that 1.5 million retirees had returned to the workforce by March 2022.
In a study published in May, the wealth management firm T. Rowe Price estimated that 48% of those working in retirement needed their paycheck, while 45% chose to work for social and emotional benefits. The study was based on survey responses of 2,895 401(k) plan participants and 1,136 retirees in 2022.
What’s more, one in five adults ages 50 and over surveyed by AARP and the University of Chicago’s NORC research firm in January said they didn’t have retirement savings.
But going back to work as an older American isn’t so simple. These job seekers may struggle to land a job because of ageism in the hiring process, said Jessica Johnston, the senior director for the National Council on Aging’s Center for Economic Well-Being. They could also face difficulty finding a job because their skills don’t meet changing technology requirements.
“For people who are trying to reenter, a lot of them need job training,” she said. “And the amount of digital literacy required to do a lot of even part-time work is not inconsequential.”
Some retirees who return to the workforce for financial reasons are also conscious that earning too much can cost them more in lost benefits than they make in take-home pay. Government assistance programs that some older Americans rely on, like Medicaid or SNAP, have income ceilings. For example, a single person in Utah, like Claudia Rufino, must keep her gross monthly income below $1,670 to qualify for Medicaid.
Rufino feels trapped in that catch-22. As a single mom, she worked multiple jobs in retail and design to support her family, but a tight budget meant she couldn’t build savings. After retiring and taking Social Security a decade ago — which currently amounts to $1,103 a month — the 72-year-old said she had been struggling to afford essentials.
To help cover her bills, Rufino took a part-time role working with foster children near her home in Salt Lake City. She said that she earns a stipend of a few hundred dollars a month.
Rufino wishes she had extra money to travel in her golden years: “I want to go see the world, but I don’t have the money to do it,” she said.
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She would pursue a higher-paying job, but she said that would risk her Medicaid benefits, meaning she would have to pay more of her healthcare costs out-of-pocket. She also lives in a subsidized housing unit, and she said a higher income would mean an untenable rent increase. Those are trade-offs she can’t afford to make.
“Going back to work is not worth it for me in my situation,” she said. “I don’t make enough money to make it worthwhile.”
