The pandemic and the uncertainty it caused in 2020 pushed many people to retire earlier than they originally planned. Now concerns about inflation and economic recession have some wondering if they should head back to work.
Dave Albin is gearing up for retirement. “What I want to do is to spend time with my grandkids. I want to spend time with my kids,” Albin says. Nearing age 70 he’s feeling confident about his financial readiness.
“I have had conversations with friends that are Baby Boomers, and some are freaking out right now because their 401ks are getting hit and the stock market is being influenced. I didn’t put all of my eggs in one basket, and again, I’m in a position where if I wanted to or needed to, I can work,” Albin explains. A program called Replace Your University is helping Albin pay off his home and boost retirement preparedness. Often others approaching retirement aren’t so sure when it’s time to go.
“I’ve rarely seen a client who is 100 percent certain, but you should 100 percent know what your tradeoffs are,” says Michael Smith, financial advisor at Smith Financial Group.
Smith sometimes sees clients looking to go back to work after retirement.
“I think the number one question you’ve got to ask yourself is ‘Why am I doing it?’ Because if it is you feel there is a big financial issue in your life or there’s an opportunity to benefit yourself financially— then get in front of a professional or talk with someone you trust,” Smith suggests. He says so-called “un-retiring” can be tough—especially if you’ve already started collecting social security.
“Social security, state retirements, pensions and so on those things have some really finite rules to them and making the choice is usually a onetime choice and you don’t get to go back,” explains Smith.
While Social Security payments can be halted, you only have a short window to change your mind after you start collecting—and everything must be paid back.
“You may not be able to do anything, but you should know that. You shouldn’t just willy-nilly go, ‘I went back to work and let the chips fall where they may on my social security. I’m only 64. I took my social security.’ Oops! You’re younger than full retirement age. That’s a big problem and could offset some part or all of your social security benefits,” Smith adds.
Three questions you should ask yourself before “un-retiring” include:
- why are you going back to work?
- does this financially make sense?
- do you have to un-do any payments you’re now receiving?
They’re important questions that you should answer, and a trusted financial advisor can help navigate.
