What Employers Can Do to Help Retirees Avoid “Unretirement”
Learn how organizations can respond to the emotional and financial challenges of unretirement to create better outcomes for employees and employers.
In recent years, an increasing number of retirees have returned to the workforce in a trend known as “unretirement.” Experienced workers returning to the company may seem like a win for employers. However, it often points to a failure in retirement readiness.
Understanding why people unretire and what organizations can do in response is critical for employers who want to develop a culture of financial wellness to support their workforce and retain talent.
Why Do Retirees Return to Work?
The reasons retirees return to work fall into two major categories: financial and emotional. Below are a few reasons these challenges arise and what employers can do to respond.
1. Financial and Planning Challenges
Some workers retire without a clear understanding of what retirement will mean financially. Without guidance, they may make premature decisions.
Combined with rising healthcare costs, inflation, and longer life expectancies, some retirees may also discover their current retirement is not enough.
What employers can do:
Partner with financial advisors to offer pre-retirement counseling and consider robo-advisor programs to automate financial management.
Host retirement readiness seminars starting years before employees plan to retire.
Provide tools to help employees project future income and expenses post-retirement.
Offer robust retirement plan options, like a 401(k) match and market-based cash balance plans.
Provide ongoing financial education and retirement planning resources.
2. Loss of Identity or a Desire to Reengage
Some retirees feel lost or bored after retirement, opting to return to work to achieve a sense of purpose and connection. Other employees fall on the opposite side of the spectrum. They enjoyed working and are looking to reenter the workforce to reengage.
Whether returning employees is positive for your organization or not, there are a few ways employers can help retirees in either situation.
What employers can do:
Offer programs or networking opportunities where retirees can contribute as mentors to the current workforce.
Help employees visualize and prepare for the emotional aspects of retirement.
Offer a modified work week for those who return, allowing them to adjust to the changes brought by retirement.
Introduce phased retirement programs, part-time roles, or consulting opportunities to support gradual transitions.
Ensure employees are aware they may withdraw their social security application one time, allowing them to return to work without cutting benefits.
The Business Case for Helping Employees Stay Retired
Retirement can create positive outcomes for both employees and organizations. A few benefits include:
Succession Planning: Clear retirements allow for better planning, skill transfer, and promotion pipelines.
Workforce Stability: Avoid readjusting teams or projects by reducing the return of retirees.
Employee Retention: Showing support for all stages of life can build trust and loyalty with current employees.
Cost Control: Reduce re-hiring, retraining, and onboarding costs associated with returning retirees. Discover other savings opportunities with our cash balance calculator.
Effective retirement plans deliver benefits to employees and employers alike. By investing in comprehensive retirement support, companies can empower their workforce to retire with confidence.
Ready to Redefine Your Plan?
October Three works directly with your HR team to unlock better outcomes for your retirement plan by combining the efficiencies of defined benefit plans with the risk profile of a defined contribution plan. If you’re looking for a modern retirement plan that can improve retention, deliver greater transparency, and provide more predictable budgeting, we’re here to help. Click here to learn more.