I was thinking about Jeanne Thompson and her work on what a successful retirement looks like. This came about as I was reading a New York Times article on the trend towards "un-retirement ". Unretirement is the move by retired people back into the workforce. Jeanne's SHIFT (Structure, hobbies, identity, friends, and thinking about your impact) makes a lot of sense in terms of what a successful retirement should look like, the article seems to suggest that some folks are having to go back to work.
The rise in “unretirement” is not explained by one factor alone. The data suggests there are at least three overlapping realities happening simultaneously:
Some retirees genuinely enjoy working and want purpose, structure, and social engagement (Jeanne nailed it here!).
Some underestimated how much retirement would cost. (Hmmm?)
Some simply cannot afford not to work anymore because the economic safety net is thinner than it used to be. (Ouch!)
The article’s observation that people returning to work tend to have more education is particularly interesting. That does not necessarily mean educated workers failed to save. In many cases, it means they still possess employable skills, professional networks, technological fluency, and healthier bodies that allow them to re-enter the workforce more easily. A retired accountant, consultant, professor, or manager can often “unretire” far more easily than a retired warehouse worker, roofer, or home health aide. The ability to return to work itself has become a form of privilege.
That said, there is also strong evidence that many Americans simply did not accumulate enough retirement assets. AARP surveys show financial necessity is now the dominant reason people return to work, with inflation and basic living costs leading the list.
I think this reflects several structural shifts in the U.S. economy:
The disappearance of traditional pensions.
Greater reliance on self-directed defined contribution plans.
Rising healthcare and housing costs.
Longer life expectancy.
Wage growth that has not kept pace with productivity and asset inflation for many workers.
Increasing responsibility shifted from employers and government onto individuals.
In prior generations, many workers had a “three-legged stool”:
pension,
Social Security,
personal savings.
Today, for many Americans, the pension leg barely exists. That fundamentally changes retirement risk.
And yes, I do think the social safety net has eroded relative to modern costs. Social Security was never designed to fully replace working income, but for a growing share of retirees it has become the primary income source. Some estimates show more than one in five households over age 65 rely on Social Security for over 90% of their income.
The bigger issue, in my opinion, is not merely retirement savings behavior. It is the interaction between:
stagnant real wages for many workers,
rising asset prices,
healthcare inflation,
housing costs,
and increasingly individualized retirement responsibility.
You can advise people to save more — and they should — but if wages are insufficient after housing, childcare, insurance, and debt service, there may simply be limited capacity left to save. Well I recall my days at 780 Post Street in San Francisco. It took one whole paycheck as well as part of my next one just to cover the rent. After food/ public transportation/utilities, I had nothing left over for my retirement plan.
So then I found myself wondering about universal basic income. I think the “unretirement” trend strengthens the argument for at least exploring some type of baseline income floor or expanded social insurance system. But UBI alone is probably too blunt an instrument unless paired with broader reforms.
A pure UBI system raises legitimate concerns:
inflationary pressure,
labor participation effects,
fiscal sustainability,
and whether payments would simply flow into higher housing and healthcare costs.
Personally, I think stronger targeted systems may be more practical politically and economically:
expanded Social Security minimum benefits,
universal healthcare or lower healthcare cost exposure,
stronger wage growth,
portable retirement benefits,
automatic retirement enrollment,
emergency savings programs,
and policies that reduce catastrophic financial shocks.
From a retirement plan perspective, this trend has major implications for 401(k) advisors and sponsors.
The old assumption was: “Retirement is a destination.”
Now retirement increasingly looks like: “partial work, phased retirement, consulting, gig income, and financial flexibility.” I have increasingly heard from employees that they don't see themselves ever retiring. As long as they are mentally able and physically capable, why would they want to stop working if they enjoy what they do?
That changes participant education entirely. Participants may need to think less about a hard stop at age 65 and more about creating optionality:
part-time work,
delayed Social Security,
flexible spending needs,
healthcare planning,
and maintaining employable skills later in life.
The Parting Glass
Ironically, the better educated workers in the article may not represent failure. They may represent adaptability. The truly concerning group may be those who need to unretire but physically or professionally cannot. And what, dear reader, do we make of that segment of the population?