Income & Retirement: Should You Go Back to Work? [Seminar Recap]


The Heyday team recently held an educational Heyday Live event for retirees titled, Income & Retirement Should You Go Back to Work?

Retired or not, here are takeaways from our presentation most everyone can benefit from:

#1. Retirement may not be exactly how it’s portrayed by non-retirees.

Throughout our careers, most of us view retirement as the ultimate permanent vacation. We daydream about it, and maybe even count down the days until we can finally call it quits. 

But once retirement finally gets here, many new retirees struggle with their new, non-working status. So much so that nearly half of all retirees (41.5%) end up going back to work at some point.1 

There may be several reasons why someone who’s already retired would re-enter the workforce. However, if those reasons are financial, going back to work could do more harm than good, as that extra income may impact:

  • Social Security benefits
  • Medicare and health insurance 
  • Pension payments
  • Required minimum distributions
  • Current retirement plans

Before coming out of retirement and potentially facing these consequences, retirees may want to identify the root cause of their discontentment. 

We’ve outlined a couple of the core issues new retirees face here: 

#2. An employer paycheck may have provided benefits beyond money (that retirees no longer receive). 

Whether it happened consciously or subconsciously, earning steady paychecks from an employer provided:

  • Reliable income: month after month, we received a predictable income that would always be there unless something unforeseen happened.
  • An actionable budget: most of us knew what our living expenses and savings goals were. We also knew how much we had left each month for recreation, like weekend trips or family outings.
  • Designated buckets for goals and challenges: if there was something we wanted to do or buy, we could save up and plan for it, or charge it and make payments. Either way, it was paid for without issue.
  • A familiar budgeting approach: Much like balancing their checkbooks, most retirees managed their finances monthly using paychecks as the guardrails for what they could save and spend.

All of these things worked like clockwork, as long as that paycheck arrived like it was supposed to. Yet, in retirement, it seems like all the rules change. 

The benefits surrounding those steady paychecks could be replaced with the idea that we must live off of our retirement assets or nest eggs. Which brings me to my next point.

#3. Spending money can be a lot harder when you don’t have a steady paycheck. 

Most of us have never had to make a lump sum last or even know where to begin. We were programmed not to tap into our savings unless it was an emergency. As a result, drawing from our savings to spend money on travel and other retirement goals may feel uncomfortable, risky even. 

To make things more complicated, none of us can predict how long we’ll need our assets to last, leaving many retirees to grapple with the nagging question, “What happens if we run out of money?” 

With all this uncertainty surrounding their finances, it’s no wonder retirees may struggle. And some ultimately re-enter the workforce to bring back that steady employer paycheck and the security it provided. 

If any of this sounds familiar, here’s some good news:

#4. Retirees can help set themselves up for steady “paychecks” while remaining retired using a particular strategy. 

There is one strategy that can help retirees who are contemplating going back to work — but want to stay retired — a retirement income plan. 

A retirement income plan can help retirees replace the things that were working during their careers, like a steady “paycheck” and all the benefits associated with it. Combined with a solid strategy, a retirement income plan can help retirees:

  • Regain the financial routine that served them well throughout their careers.
  • Reclaim the ability to budget and plan for goals and expenses.
  • Gain the confidence to spend their monthly income knowing exactly what will be there next month.

If you’re retired and considering going back to work, our free online guide, “Thinking of Coming Out of Retirement?,” can help you explore other options. 

Or, if you’re ready to see how much income you may need for the retirement you want, create your personal retirement income plan for free using the Heyday App.

Considering going back to work? We invite you to consider this:

Free Online Guide: Thinking of Coming Out of Retirement?

Cindy Collins

Written by Cindy Collins

Forbes Contributor & Retirement Financial Professional

Cindy Collins is a Heyday Retirement contributor with over 30 years of experience in personal financial services.

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