I have made the point before and will, I’m sure, make it many times to come. People when they retire, lose their work income and switch to income from investments which they think of as their pension. That money can come from house lets or from inherited capital or it can come from savings in a pension plan, but unless that pension plan lasts as long as you need it to last, you may find yourself “fired from retirement” and having to return to work.
There is no relief for older people from inflation. We still have to pay for energy to heat our house and drive our cars, food in the supermarket goes up and up and many of us have to buy on the yellow label to make ends meet. We have council tax to pay,
This is reality not just for those in the United States of America. The FCA research in this country, conducted by Ignition House, tells us that the most common destination of pension pots is into bank accounts and too often it is spent too early. This is why the Government is using its Pension Schemes Act to require workplace pensions to default people into retirement income which should last as long as they do. Nest, which has 98% of its 14m savers following whatever default it gives them has got permission this weeks to offer them a flex and fix plan which looks as close to a pension as a DC plan can do!
Of course, if there is not enough in the Nest pot to pay the income people need to keep them “getting fired from retirement” then there is a problem. Many people will retire on inadequate income and will have to raid their pension pots and when they’ve done that they’ll still have to return to work.
The author of the survey and accompanying report
In a recent survey of 2,500 people in Britain, the most important thing to ordinary people was that state pensions grew at least as fast as inflation and (with the triple lock) in some years faster. People know they cannot live on the state pension but they know it is theirs forever and for their partners when “forever” ends.
The report’s by Andrew Harrop and he finds that people are self centered , demanding that as much of the money going to people’s retirement, goes to keeping them from being fired from retirement.
I don’t want to disappoint those who think that engagement will get them there but for most of those interviewed they expected to have things done for them.
Infact the two things that people didn’t fancy was having to make their more of their own pension contributions and lose their anticipated state pension increases (the columns going to the left and at the bottom).
In the trade-offs between getting fired from retirement and getting more of their pay deferred, people will accept getting it done for them – even though most people know that that leaves less money for negotiating better pay rises today.
We think of improving our pensions as a way of protecting ourselves from being fired in retirement and returning to work. This is what goes through their minds as they read the holiday brochures and the price page at the back.
All of this spells out that people will be prepared to pay taxes in return for security later in life; whether these taxes go to accrue state pension or to accrue private pension, they expect to have a plan to keep them from returning to work after being fired from retirement
Tell the whole story. Retirement in America is a relatively new phenomenon. Returning to work after retirement is nothing new.
Up through the 1970’s, Americans worked not until “retirement age”, but often until they were physically spent and could work no more. Work was more physical, blue collar. Most Americans in the labor force worked into their mid-60’s or later prior to retiring, changed to a mostly sedentary life, and died after a period that didn’t average much more than 10 – 15 years.
Further, most workers were never eligible for a pension plan. And, for those who were participants in a pension, most never vested because the median tenure of American workers has been less than 5 years for the past 7 decades, and the median tenure of American workers age 50 has been less than 10 years – while most pension plans used 10 year vesting until 1989.
Data show workforce participation among older Americans had steadily declined for decades. In the 1950’s and most of the 1960’s, more than a third of age 65+ males were in the workforce. By 1993, that percentage had declined to 15.5%. Over the past 30 years, as work changed in America and as more and more Baby Boomers obtained post-secondary education, the percentage of the age 65+ male population still working has increased 50+%, to 23.4%.
https://www.bls.gov/opub/btn/volume-14/golden-years-older-americans-at-work-and-play.htm
For many decades, most Americans tended to claim social security benefits as soon as they stopped working. And, because benefits became available at age 62, many stopped working and submitted a claim. More recently, people are paying attention to the reduction for commencing payment early, and over the past 25 years, in part because of the changes in Social Security Full Retirement Age, the average age at commencement has increased from 63 to 65.
https://crr.bc.edu/wp-content/uploads/2021/03/Average-retirement-age_2017-CPS.pdf
The Times article is sensationalist. Yes, stories of older Americans working past the typical retirement age have captivated social media. But isn’t that typical of social media. This is not a new trend. A significant minority of Americans “retire” before they intended and before they planned. That has been a consistent finding of the Employee Benefits Research Institute’s annual Retirement Confidence Survey.
https://www.ebri.org/docs/default-source/rcs/2026-rcs/2026-rcs-release-report.pdf?sfvrsn=1229022f_1
And, unsurprisingly, a percentage of them return to employment, for a variety of reasons.
Note each of the individuals in the Times story:
• She retired in 2020, confident she and her husband could get by on around $2,200 in Social Security benefits and a small monthly pension … So four years ago, Ms. Archer decided she had to return to work.
• Sharon Simmons, an Arkansas woman known as “DoorDash Grandma,” who has worked the gig job since 2022.
• Brandt Hess retired in 2024. … )retiring on a) $4,000-a-month pension felt more plausible. That feeling did not last long. Mr. Hess, … began searching for jobs. He landed one last year at a local credit union.
• James Jones, … retired from his job as a cook at a hospital in 2021 (age 66), when he was diagnosed with prostate cancer and, later, lung cancer. Now 72, his cancer in remission, he found a job in the kitchen of a local program that delivers meals to people his age.
Almost every one of these stories reflect an individual who apparently didn’t identify prior to retirement that their retirement income would be inadequate, if not initially, then after inflation, where they returned to employment within one or two years.
The exception, Mr. Jones, is typical in that he retired at age 66, likely before he planned to retire, due to a medical condition.
However, less than 5% of age 65+ Americans (when you account for transfers) have incomes below the official poverty line. And, studies by EBRI, and the Society of Actuaries and others report that most retirees are able to maintain their standard of living in retirement – even if they were prompted to retire before they planned because of changes in employment, health, caregiving, etc.
Most importantly, the Times article suggests these decisions to return to employment were due, in part, to recent increases in gas prices from America’s conflict with Iran. However, each and every one of the people identified in the survey returned to employment prior to 2026, all but one prior to 2025.
This is Times bashing President Trump. He deserves a lot of criticism, but certainly the trend of individuals retiring prematurely and later returning to work (whether for income/need or for other reasons) long predates even the first Trump Administration.
I wrote a separate note that is likely being moderated as I post this.
However, Americans of all ages, even many of the 40% who don’t pay a penny in income taxes, believe they are all paying too much for our government and entitlements.
That’s why you hear all the calls for “tax the rich” from Bernie, Liz, AOC, Mamdani, etc.
We’ve known since the early 1990’s, during the first Clinton Administration, that the Social Security and Medicare Trust Funds would be exhausted early in the 1930’s. And yet, no one seems interested in increasing taxes … and most Americans believe the politicians will wait until the trusts are all but exhausted, as they did in 1983.
It is why a famous slogan in America is “Don’t Tax You and Don’t Tax Me, Tax That Guy Behind the Tree.” or, “The Best Tax Is The One I Owe and YOU Pay!”
Fact is, the federal Social Security system provides a significant benefit to most lower and middle income Americans who paid in for 35 or more years. Those folks believe they have paid enough, and they want someone else to pay more to secure continuation of their retirement entitlements.
It would be interesting to know if there are any details on the people going back to work after retirement in the UK, plus why they do so. The people I have known go back to work are healthy and are just bored with retirement. For those who are unhealthy, going back to work is rarely a practical option.
Yes I know what you’re talking about but I’ve just been chatting people at church who are elderly and are still working though drawing a state pension. One or two aren’t able to think about retiring though well past the pension age. I didn’t ask if they’d expected to be retired by now. Amazing people who are older but much more energetic than me and most of my peer group.