Many retirees dream of working in retirement — not out of necessity, but to stay engaged, contribute meaningfully, or even pursue a passion project. But while the idea sounds great on paper, reality often paints a different picture.
Let’s explore what’s known as reemployment risk, and why it’s essential to plan carefully if working in retirement is part of your financial strategy.
What Is Reemployment Risk?
Reemployment risk refers to the potential inability to supplement retirement income through work. This can happen for a number of reasons, including:
- A tight job market
- Health issues
- Caregiving responsibilities for a loved one
Example:
Robert, a skilled woodworker, had planned to make and sell handcrafted furniture online during retirement. Unfortunately, health challenges made it difficult for him to continue his craft — leaving a financial gap he hadn’t anticipated.
What the Research Says
The Employee Benefit Research Institute’s Retirement Confidence Survey consistently shows a gap between expectations and reality:
- 79% of workers expect to work during retirement
- But only 29% of actual retirees do
So why do people want to work in retirement?
- 90% want to stay active and involved
- 82% simply enjoy working
- 67% want money for “extras”
- 42% need the income to make ends meet
- 23% want to make up for investment losses
- 13% want to keep benefits like health insurance
What Work Looks Like in Retirement
Retirement work can take many forms - part-time gigs, consulting, or turning hobbies into income. But finding those roles isn’t always simple.
Here’s what to keep in mind:
- Most companies don’t offer formal phased retirement
- You may need to find a bridge job or work for a new employer
- Health, family obligations, and market demand for your skills will affect your options
- While part-time jobs often pay less, many retirees report greater job satisfaction
Planning Ahead: Realistic Expectations & Smart Moves
If working in retirement is important to your lifestyle or financial plan, here’s what you can do:
- Don’t count on employment as your main source of retirement income
- Consider postponing full retirement if you're still earning well and receiving benefits
- Explore opportunities now — not later — that align with your skills and interests
- Check out helpful resources like
👉 “What Color is Your Parachute? For Retirement”
👉 AARP Job Board
- Also, be open to reskilling or upskilling — new learning can open new doors.
Final Thought
Even if you're not relying on the paycheck, work in retirement can provide something just as valuable: purpose, structure, and connection.
That said, having a solid financial plan that doesn't depend on working is key to retiring with confidence.