Advertisement

Un-Retirement: Should retirees rejoin the Workforce?

Published: May. 25, 2022 at 11:50 PM PDT
Email This Link
Share on Pinterest
Share on LinkedIn

RENO, Nev. (KOLO) - Millions who retired during the pandemic are returning to the workforce. Labor Department data indicates that 1.5 million retirees have reentered the U.S labor market over the past year.

Some industries, including caregiving, are encouraging seniors across the country to “unretire” and get back to work.

Nina Chase is currently a care professional at Home Instead, which for her is more than a job.

“You have a chance to touch somebody and make their lives better, and I come home in a good mood, I’m happy, I’ve helped people... and they love you,” said Chase.

When two clients she had been taking care of for eight years passed away in 2015, she decided to retire.

“My heart was broken,” said Chase.

Three years later, she jumped back into the workforce and fulfilled her dream of working in the jewelry industry.

“Financially, we can’t survive on social security, you have to have something else and I’m a young 74-year-old and choose to stay active,” said Chase.

She’s part of a growing trend of retirees going back to work. Some are being tempted by more flexible work arrangements and declining concerns over COVID-19, for others it’s inflation.

Matt Rowley, the CEO of Freedom Retirement Services in Reno says unretiring can be beneficial for those in the so called, ‘Retirement Red Zone’. That’s the first five years before and after retirement.

“If they’re within that red zone, what happens in the market will have a drastic impact on their future financially,” said Rowley. “So with the market going down like it has been, there are a lot of folks who may have been more aggressive than they wanted to be and have lost quite a bit in their retirement savings lately.”

Aside from taking advantage of the increased benefits and perks many employers are offering right now, those reaching retirement age and choosing to continue working can boost their retirement savings. Your Social Security benefits increase for every year you wait to claim beyond your full retirement age. However, Rowley says others need to consider the financial implications. Seniors over the age of 72, must take a Required Minimum Distribution (RMD) from their IRA accounts or face a heavy tax of up to 50%.

“Folks are forced to start taking money from their retirement savings, IRA, 401k,” said Rowley. “That does count as income because those are pre-taxed dollars, they’ve started social security, which also raises their income so, if they add a full income salary on top of that, it can put folks into a higher tax bracket.”

Experts recommend to carefully track your income and plan accordingly to make sure you’re not caught off guard when tax filing season rolls around. Make sure to check which tax bracket you fall into every tax season because the IRS adjusts the tax brackets each year to account for inflation.

Rowley says adding more income can also impact premiums for Medicare.

“Dropping and rejoining Medicare can be a complicated process. To avoid future penalties, make sure to consult your financial professional,” said Rowley.

Before leaving retirement: Know Social Security Limits, adjust your Medicare needs, plan for RMDs and tax Bracket Changes.

After years in the jewelry industry, Chase decided to go back to caregiving. She has now been at Home Instead for three months and says her only wish is to have gone there sooner.

Freedom Retirement Services can offer a complimentary evaluation to see how best they can help. For more information, call (775) 746-1199.

Now, if you’ve decided to come back to the workforce and would like to become a caregiver, you can call Home Instead at (775) 234-3519.

Copyright 2022 KOLO. All rights reserved.