More Older Americans Are Un-Retiring. Should You?

Many people retire with the intent to never work again. But in a recent AARP survey, 6% of older Americans said last summer that they'd returned to work over the past six months.

The main reasons for un-retiring? A need for money/poor financial outlook and boredom.

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Both are very valid reasons for returning to work. And if you're a retiree who's unhappy financially or emotionally, you may want to un-retire yourself.

Working after retiring has its benefits

Many people find themselves unpleasantly surprised by how much retirement costs, and by how poor a job Social Security does of covering the bills. If you're having a hard time paying your expenses as a retiree, working in some capacity is a good idea. The extra money could take a lot of the pressure off, plus give you a safety net in case unplanned bills like home repairs pop up.

Retirement also has a way of being more boring than people anticipate. It's one thing to have a couple of free days a week. It's another thing for every single day to be unstructured.

Going back to work could help alleviate boredom and serve as a social outlet if you're feeling isolated. It could also help you earn extra money that can pay for more activities and entertainment.

Beware the pitfalls of un-retiring

While returning to the workforce after retiring could be a smart move, you might encounter a few challenges. First, if you're collecting Social Security but have not yet reached full retirement age, you'll be subject to an earnings test. Earning too high an income could result in having benefits withheld.

You may also push yourself into a higher tax bracket by returning to work. And if your income is high enough, you could end up with surcharges on your Medicare premiums known as income-related monthly adjustment amounts.

Plus, finding work later in life can be challenging. You may be grappling with mobility issues, and you may not have the energy for certain roles. It could take some trial and error to find the right fit.

An option worth exploring

If you're unhappy with your retirement finances or you feel you don't have enough to do with your time, returning to work could be a smart move. Just be aware of the different ways a return to work could impact your finances.

Obviously, you're looking at boosting your income to some degree. But that could come at the expense of higher taxes and withheld Social Security. Run all of the numbers so you're clear on what to expect.

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