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One-third of retirees end up getting full-time jobs

Nicole Sinclair
Markets Correspondent

One-third of those who retire actually come back to the labor market and take another full-time job, according to Deutsche Bank’s Torsten Sløk.

This “reverse retirement” rate is higher for workers in the highest and lowest income quintiles, as shown in the chart below.

“Retirees either come back because they need more income (lowest income quintile) or they come back because the opportunity costs of staying at home are too high (highest income quintile),” Sløk explained.

In addition, half of all retirees are working part-time, according to the economic data from the Federal Reserve.

“We suspect they either do not think of retirement as the state of no longer working or they find that, unexpectedly, they do not like not working and would rather return to work,” according to the study.

This complicates one of the commonly-cited reasons behind the still-low labor force participation rate (LFPR), which stands at just over 63% versus 67% two decades ago. The LFPR, or the percentage of working-age people either working or actively looking for work, is seen as an important barometer of the health of the labor market.

With the global share of people over 65 years old doubling by 2050 to 16%, some economists suggest that the aging population is contributing to the lower participation rate. But Sløk explained that more older individuals looking for work could push up the overall participation rate for the entire economy. The participation rate for those 65 and over has increased significantly in the last 30 years, up from just over 10% to 20%, according to Sløk.

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