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J.R. Whalen: Here’s Your Money Briefing for Wednesday, February 21st. I’m J.R. Whalen for The Wall Street Journal. More than 4 million people in the US will turn 65 this year, but a growing number of people are putting off full retirement and taking on part-time jobs.
Clare Ansberry: The majority say it’s for financial reasons. They feel like they don’t have enough money or they’re going to run out of money, a cost of living, inflation, that’s the biggest reason they’re going back. About a third of them also are just bored.
J.R. Whalen: We’ll talk to Wall Street Journal columnist Clare Ansberry after the break. More retirees are spending their golden years working part-time jobs. Wall Street Journal columnist Claire Ansberry joins me. Clare, give us the big picture about how many people are reaching retirement age this year.
Clare Ansberry: More than 4 million Americans are going to reach 65 this year, and that translates into about 11,200 people a day. So a good chunk, and that high level is going to be sustained through 2027. So a lot of people are reaching that age that we traditionally associate with retirement.
J.R. Whalen: About how many retirees plan to go back to work?
Clare Ansberry: Well, overall, about one third of adults, 65 to 69 have jobs, and that’s up from less than a quarter in 2000. As to how many of those were retired and returned to work isn’t clear, but surveys suggest that it’s a lot. One survey showed that one in eight people who are retired plan to go back to work this year, and another survey found that one third of current retirees in this age are considering returning to work.
J.R. Whalen: How are the finances of this current crop of retirees different from past generations?
Clare Ansberry: In past generations, more retirees had these pensions, so they had guaranteed income that would support them through their life, but most of them don’t have that now. So they are basing their retirement planning and their needs on their own savings. It’s what they have and that has to last them long because we’re all living longer and many of them are feeling they just don’t have enough. They don’t have that security, so that’s why they’re going back to work.
J.R. Whalen: You spoke with several retirees who have gone back to work. Why are they doing that and what’s their experience been?
Clare Ansberry: The majority say it’s for financial reasons. They feel like they don’t have enough money or they’re going to run out of money, a cost of living, inflation. That’s the biggest reason they’re going back. They’re paying off debt. Some of their careers have been interrupted for caregiving. Others had to retire earlier than they expected because of layoffs or again, ill relatives so to care for them. So that’s why they’re going back. And about a third of them also are just bored.
J.R. Whalen: Did the retirees that you spoke to say they went back into the field that they were in during their careers?
Clare Ansberry: Some of them have. There was a woman, Joyce Fleming, and she’s 70 years old right now. She’s a nurse and she retired in 2019. One reason she retired is she had a long and successful career in satisfying, but she was also commuting over an hour back and forth to the hospital where she worked. She had just felt like, okay, I’m ready to retire. And then the pandemic hit and she took care of her grandkids. And then after that was just seeing her costs rising, so she wanted to go back to a part-time job. And so, she helped with a call center for about six months, and then she worked as a case manager at another hospital for a little over a year just to help pay the bills and also because she wanted to do some traveling. But those jobs were also far away, so she really felt like she wanted a better paying job and one closer to home basically to help cover things like home improvement costs, getting electrical work done, just things to help with the house.
She said the cost of living after COVID just skyrocketed. And then I spoke with a 65-year-old man from Wisconsin. He retired from a career as a journeyman who replaced glass windows on his 63rd birthday and the following month he had another job. He was driving a school bus. He wanted something that was part-time that gave him kind of a steady income. He wanted to do a service to his community, so he really planned ahead. The month before he retired, he contacted the bus lines, found out he had to get a commercial driver’s license. So he works about six hours a day. The pay is $22 an hour. When he got his first paycheck, he showed it to his wife and said, “Holy smokes, look at what I got paid.” Money was never tight, but it’s just made things a little bit more comfortable. He can go out and buy a camper, but at the same time, it’s not so demanding on his time that he still has his hobbies of woodworking and he’s really enjoying it.
J.R. Whalen: How are these financial issues affecting people who are still approaching the traditional retirement age of 65?
Clare Ansberry: Everybody in that age range, the pre-retirees are now looking at a longer life. They can expect to live another 20 years. So maybe when they were younger, they would think, okay, if I can support myself for another 10, 20 years, I should be good. But now, they’re looking at having to support themselves for far longer, which is a good thing. But it could also, as you age, you’re going to have higher costs for caregiving. They don’t want to be caught short. They don’t want to be a burden to their kids. So I think that reality is really kind of hitting them. A lot of people who retired were sort of budgeting and planning for costs and prices that they had in recent years, but we’ve all seen how prices can rise and fall, but you can’t count on them being at a sort of a gradual rise.
So people are just having to be cautious and plan ahead. And a lot of the people who have retired said that certain things they didn’t expect, underestimating the basic living expenses. Things like housing costs, housing improvement costs, medical care, just things like transportation. Their cars are more expensive, insurance is more expensive, prescriptions are more expensive, more older adults now too are supporting their adult children and helping them out. Kids and grandkids coming back to live with them or helping with the college expenses. Parents took out loans to help their kids get through college. So those are things that were kind of unexpected.
J.R. Whalen: What kind of lesson can workers in their 40s and 50s learn from this?
Clare Ansberry: The biggest lesson is start saving early and start planning early. And the basic one that goes throughout our lives is don’t live above your means. And the idea of maxing out on your retirement plan contributions and keep on doing that, if you build that into your practice and into your savings and into how you live your life. The save early, save off and don’t live above your means is something that all people have pretty much advised.
J.R. Whalen: That’s WSJ columnist Clare Ansberry, and that’s it for Your Money Briefing. We’ll be back tomorrow with WSJ’s Ray Smith to discuss how some offices are encouraging workers to return by making the place smell better. This episode was produced by Ariana Aspuru, with supervising producer Melony Roy. I’m J.R. Whalen for The Wall Street Journal. Thanks for listening.