For Americans born in the 1970’s and beyond, these are unprecedented times. For most Americans, these are uncertain times. For retirees, whose income is being assaulted by high inflation and loss of purchasing power, it’s unlucky and unfair, making them unhappy and forcing some into unretirement.
According to the Bureau of Labor Statistics, the number of retirees in the U.S. jumped from 28.3 million in February 2020 to 31.6 million in October 2021. But inflation changed things quickly. Indeed Hiring Lab says by March 2022, more than one million people who were retired the previous year had gone back to work.
Something similar happened during the Great Recession from 2007-2009. Workers were enticed out of retirement because the labor market became more lucrative. But inflation stayed within range of the Federal Reserve’s long-term 2% target with a very brief spike up to 4% in 2011.
The situation is different this time. First, there was the economic chaos caused by the covid-19 lockdown followed by a once-in-a-generation inflation surge. The numbers from March 2022 show an inflation rate of 8.5%. That higher cost of living is creating hardships for people living on fixed incomes. Tack on a 14.5% increase in Medicare premiums that began January 1, 2022 and it’s easy to understand why more retirees are going back to work.
As unretirement picks up steam, employers are ramping up incentives to fill 11.5 million job openings. There are 5.6 million more vacancies than there are available workers. In an attempt to lure people in to fill those jobs, more job postings are mentioning things like hiring bonuses and retention bonuses.
Retirees would certainly like to undo the economic woes they’re experiencing. If unretirement is the answer, now may be a great time to make the move.