Retirement is supposed to be the endgame – a chance to leave the working world behind for good and settle into a completely new phase of life, ideally with a healthy superannuation balance. That ideal, though, is no longer everyone’s reality, and the result is a growing trend of retirees returning to work.
Why are so many people opting to “unretire”? There’s no one reason. Australia’s 4.2 million retirees are all individuals, with their own circumstances and motivations.
“One of the amazing things about retirement is it’s different for everyone, and I think it’s always important to give that context,” says Debby Blakey, the CEO of the super fund HESTA.
But for some people, the return to work is driven by money.
The financial incentive
Among people thinking about retiring, the main factor influencing their decision is financial security, the ABS reports. Those who feel financially unprepared are likely to put off retiring for longer.
The financial pinch is also affecting people who have already retired. It is reshaping how many retirement-age Australians think about work in their later years.
“For some it is transitioning into retirement, transitioning out of retirement, transitioning back into retirement,” Blakey says. “For some people, it’s actually very fluid, but I do think at the end of the day, what everyone wants and deserves is a regular and reliable income in retirement.”
While super funds such as HESTA are doing their best to help members increase their super balances and learn how to live on those savings in retirement, factors such as an escalating cost of living and a desire for a greater quality of retired life are among the reasons behind what has been dubbed “the great unretirement”.
Even occasional work can offer retirees a big financial confidence boost, Blakey says.
“When people are in retirement and they’re in this journey of transitioning to being [superannuation] spenders, having the opportunity now and then through temporary work or taking on contract work and being able to have a sense of still being a saver in some element is actually really important to build their confidence and to help them in that transition.”
Searching for a greater purpose
Taken at face value, returning to work post-retirement or staying in work longer than planned can seem like correcting a mistake – particularly if it’s done for financial reasons. But not everyone who works through their nominal retirement years or returns to work does so for the money. Dr Zena Burgess, the CEO of the Australian Psychological Society, says returning to work can fill a void that can’t be counted on a bank statement.
“The transition to retirement can impact mental health, self-identity, and social relationships, and can either enhance or reduce life satisfaction depending on a multitude of factors,” Burgess says. “Some retirees experience improved mental health due to reduced job-related stress and increased leisure time. However, for others, retirement can exacerbate mental health issues due to isolation, reduced social networks, or a lack of purpose, among other factors.”
For someone yearning for purpose, and perhaps missing the excitement and social connection that came with their previous role, continuing to work, or unretiring, can provide a mental health boost – and anything from a passion project to volunteer work is fair game.
“Retirement may result in significant shifts in identity, particularly for those whose sense of self is strongly tied to their professional roles,” Burgess says. “Involvement in professionally related social activities, volunteer activities and learning new skills are of value to maintaining engagement and relevance.”
Blakey believes the desire to retire from your main role but continue working elsewhere makes sense in the context of purpose and fulfilment, particularly considering HESTA members predominantly work in health and community services.
“As you get older, those roles can be very difficult,” Blakey says. “But that need for connection with community and that need for feeling that you are making a difference is really important for our members, and that’s why I think many of them do seek those opportunities to continue impacting other people’s lives and making a difference.”
Work-life balance and preparing for retirement
Whether their members are staying in work longer, taking a career sidestep or returning to work after a period of retirement, Industry SuperFunds such as HESTA say they are dedicated to supporting them.
“For many of our members, work-life balance is balancing paid work, unpaid care and other interests that they may have,” Blakey says. “I do think it’s incredibly important for our members to find that balance where they are able to do the things that matter for them.”
Considering that retirement may present mental, financial and social hurdles, it’s important to know help is available – whether that be planning for the future with an industry fund such as HESTA, or speaking to a mental health professional.
Burgess says: “People can also work with a psychologist to support their retirement planning and help navigate this transition, and to ensure that they maintain a sense of purpose and develop meaningful social networks once they’re no longer in the work setting.”
The information provided in this article is of a general nature only and does not constitute financial or other advice. It is important to consider personal objectives, financial situations or particular needs when making financial decisions.
