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Millions of Americans retired – many early – in the face of the COVID-19 pandemic, but with 5.6 million more jobs available than workers to fill them, many who left the workforce are eyeing a return to the workplace.
Seeing the world through a porthole view and spending sunlit afternoon strolling through European capitals, Mike Guidry never dreamed he would return to the corporate world once he was finally enjoying his golden years. After a 40-year career in banking in a variety of roles and departments, including trusts, brokerage, wealth management, private banking, and credit card operations, he always planned to retire at 62, but when the opportunity to retire at 58 presented itself he took it.
“I was at Whitney, in trust and brokerage and very happy. Loved my job,” he said. “Three days before Christmas 2010, I woke up to the announcement that Hancock purchased the bank.”
The prospects of going through a merger – an experience he had when the original First NBC was bought by Bank One – and its associated redefining of roles, introduction of new management, and interoffice politics going up the ladder was one that Guidry wasn’t keen on going through again.
“I was eligible for an enhanced package out and had always wanted to retire early but kind of had a target more like 62ish,” he said. “It was not where I wanted to be and a little scary, but I decided to jump anyway. I was newly married, not even married a year when this happened. So, suddenly it was much different than we thought it would be. But we agreed to take the leap and see where it leads us.”
With time and savings at hand, the pair began spending more time at home and visiting their bucket list destinations around the world.
“I was given a golden opportunity to just sit there and ponder what I wanted to do with my life,” he said. “I’ve always been a person who likes to travel, and we ramped up the travel to ridiculous levels, quite honestly.”
After four years of enjoying the fruits of his labor, Guidry attended the grand opening of Gulf Coast Bank & Trust’s Magazine Street branch where he struck up a conversation with a wealth manager that turned into a job offer over breakfast the next day.
“I’ve been at Gulf Coast over eight years now,” he said.
A look at the numbers
Guidry’s story is not unique and as the job market stays hot for employees many economists believe it may become more common, especially as the world continues to work through COVID-19, Russia’s invasion of Ukraine, rising prices, and associated economic impacts.
According to a March 2022 report by Geoffrey T. Sanzenbacher and Matthew S. Rutledge, associate professors of economics at Boston College and research fellows at the Center for Retirement Research at Boston College, more than 15 million people ages 55-70 are retired. They say the rate of unretirement has been relatively low over the last four decades, averaging a little more than 6 percent. They found a 1-percent increase, year-over-year, in a state’s job opening rate is associated with a 0.5-percent increase in unretirement, especially among relatively younger workers, more educated workers, and men.
When the pandemic hit, many companies were faced with employee retirements, quits, layoffs, and forced furloughs. The nation’s unemployment rate grew to 14.8 percent in April 2020, the highest since the Great Depression.
According to an October 2021 report by Miguel Faria e Castro, a senior economist with the Federal Reserve Bank of St. Louis. The labor force participation rate registered its largest drop on record in 2020, falling from 63.2 percent in the fourth quarter of 2019 to 60.8 percent in the second quarter of 2020. The rate increased to 61.6 percent by the second quarter of 2021 but was still 1.6 percentage points below its pre-pandemic level. That equates to nearly 4.2 million people who left the labor force. Additionally, the Institute for Economic Equity’s January 2022 Current Population Survey reported there were 3.3 million or 7 percent more retirees in October 2021 compared to January 2020.
“A significant number of people who had not planned to retire in 2020 may have retired anyway because of the dangers to their health or due to rising asset values that made retirement feasible,” Faria e Castro wrote in the Federal Reserve report.
He found the percentage of retirees in the U.S. population was relatively stable at around 15.5 percent until 2008, the beginning of the Great Financial Crisis but also when the oldest Baby Boomers, those born in 1946, turned 62 and became eligible to receive Social Security retirement benefits. In February 2020, just before the virus became a global pandemic, the rate was at 18.3 percent and grew to 19.3 percent in August 2021.
“There were slightly over 2.4 million excess retirements due to COVID-19, which is more than half of the 4.2 million people who left the labor force from the beginning of the pandemic to the second quarter of 2021,” Faria e Castro wrote.
According to the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS), there were 11.5 million job openings at the end of March 2022, a month that saw 6.7 million hires. The Labor Department reported 6.3 million separations, which includes layoffs and discharges (1.4 million) and a record high for quits (4.5 million). In the New Orleans-Metairie metropolitan area the March 2022 unemployment rate was 4.4 percent, down from 6.2 percent a year before.
While the housing and stock markets seemed to go through the beginning of the pandemic unscathed, making retirement more feasible for many people, rising fuel costs and inflation combined with the Federal Reserve’s increase in interest rates has created concern that the dollar’s purchasing power has diminished. That is leading economists to think that some of those who retired in the past few years may decide to go back to work to make ends meet or to add to their nest eggs, especially if the potential job and associated benefits are attractive.
With job openings outpacing the number of available workers nationally by 5.6 million, employers are doing what they can to lure top talent to their companies, including increased wages, bonuses, and flexible work schedules, while keeping afloat during challenging economic times. According to the Labor Department, average hourly earnings were up 5.6 percent in March from a year ago, but inflation increased 8.5 percent over the same period. That’s causing workers to ask for more, making the situation ever challenging for employers.
As a result, they are considering all options, and one they are finding success with is luring retirees back to work on a full, part time or voluntary basis.
Reasons to return
The Indeed Hiring Lab, an international team of economists and researchers of the global labor market, reports that during the worst of the pandemic, 2 percent of workers who retired came back to work a year later. Now that number is at 3.2 percent, the same level it was pre-pandemic. Indeed says there are four major reasons people go back to work after retiring: additional income, fulfillment of identity and purpose, a sense of community, and to aid a former employer.
“We’re hearing a lot about unretiring in the media right now. That’s really concentrated in the 55 to 64 age group,” said Jen Schramm, a senior strategic policy advisor at the AARP Public Policy Institute whose areas of expertise include employment trends, policy challenges and opportunities related to workers and jobseekers ages 50 and up.
“The older an individual is, the less likely they are to return full time. The older ages that do come back are more likely coming back to work part time. So, for those large numbers that retired during the pandemic it’s more likely that the people beyond traditional retirement age are retired, rather than people that are younger than that age.”
AARP member surveys show finances are the main reason retirees choose to re-enter the workforce, according to Schramm. “There are different financial reasons that you can put in one bucket,” she said. “Some of it is the need to save for retirement, to pay for everyday expenses; some older adults go back to work because they want to help out younger family members. There are also other reasons some people go back, including, personal fulfillment and social interaction.”
David John, senior strategic policy advisor at the AARP Public Policy Institute, where he works on pension and retirement savings issues, said current market fluctuations and inflation have given people concerns about whether they have enough resources to have a comfortable retirement.
As of June 1, the national average for a gallon of gas was $4.67 a gallon, and there’s no relief on the horizon. Increases in fuel prices create a domino effect of rising prices through the economy, John said.
“We have been in a low-inflation environment now for several decades, and it’s going to take people a while to start to recognize that they need to adjust and they can adjust,” he said. “For many, the question becomes whether it wouldn’t be a better idea to go back to work, increase your savings and have less time that you have to rely on your savings and your other retirement benefits.”
Misjudging the longevity of retirement savings is a major concern for American economists who believe the country is facing a growing crisis. According to the Center for Retirement Research at Boston College, a 65-year-old American is expected to live an average of another 19.4 years, and many don’t have a nest egg built up to last them that long. Most Americans (59 percent) believe that they will have to keep working longer to be able to retire comfortably and 36 percent say they will never have enough money to be able to retire at all, according to the Natixis Global Retirement Index. The recent increase in inflation has also forced some retirees to go back to work to deal with rising costs that they wouldn’t be able to cover on a fixed income.
Sense of Purpose
Guidry said the major reason for his desire to return wasn’t financial, but rather the satisfaction and the camaraderie the office place provides. While he returned to work in wealth management, something he said he would do as a hobby, today he is working in the bank’s human resources training division.
“I didn’t plan to go whole hog, but I like having purpose,” Guidry said, “The work I do helps people. I help people achieve their goals. There’s no politics involved. It’s just helping people. That gives you a lot of fulfilment.”
An additional benefit of the workplace – outside of the COVID pandemic – is its social environment and opportunities for conversation and friendship with coworkers.
“When you unplug from that you unplug yourself from a lot of activity,” Guidry said. “You know, some of the talk at the watercooler, going to lunch and all that kind of stuff, that is what I missed. What I didn’t miss was being a manager and being responsible for tons of people. Now, I’m not responsible for anybody. I’m more project oriented. When I’m finished, I can walk out and don’t have any residual responsibility. It’s kind of deliberative at this point. I have the freedom to work and not be a prisoner to it.”
For Lorene Holbrook, 78, volunteering at Ochsner Health in Jefferson is about the alignment of personal and organizational missions. After a 33-year career at the hospital, Holbrook retired in the summer of 2005 and has stayed on as a volunteer for the past 17 years.
“When I retired, I decided to continue volunteering to do things that I felt more strongly about,” she said. “Maybe being a child of the Greatest Generation, the idea of giving to one’s community has always been in my genetic makeup. I was very aware of the value that volunteers bring to an organization and the wide scale of opportunities that volunteers have in deciding where they want to put their time and effort.”
Since 2012, Holbrook has been involved in locating and sourcing art on a temporary or permanent basis to display in Ochsner’s public spaces as part of the hospital’s mission to create a healing environment for patients and staff.
“Our patients, our families, our employees need to be able to find a spot where they can spend – even if it’s 30 seconds – a moment of rest,” she said. “We live in such a noisy and mentally cluttered environment. Any opportunity to ponder something outside of ourselves is important. Art is an important form important therapy, and I think everybody deserves to have that – especially in a hospital.”
For individuals considering volunteering, Holbrook advises they do something that means something to them. For organizations that utilize volunteers, she said they need to make their work meaningful. “If someone starts to volunteer and you don’t give them enough to do, they’re not going to stay,” she said.
Guy Williams, Gulf Coast’s president and CEO said the bank has hired several unretirees, who, generally, bring all pros and no cons.
“We’re happy to see people return because they bring institutional knowledge and a lot of skill,” Williams said. “From an employer standpoint, we haven’t had any problems. We’ve had some older people come back and they tend to be a little more grounded. There’s less drama. They’re not trying to set the world on fire. They just want to have something to do and make some money.”
Williams said those who return generally fall into two categories, the financially stressed or bored.
“We have those who suddenly say, ‘I better get some more money,’ others who wake up with nothing to do and want to work, and those who think it’s fun to be home for a while, but not all the time who work part time, like Tuesday, Wednesday, Thursday, and then have a very long weekend.”
Katie Daher, assistant vice president of Patient Experience which covers guest, volunteer, and spiritual care services at Ochsner said retired volunteers not only help get work done, but also serve as ambassadors in the community.
“We’ve had several who, after they retire, they decide that they need to or want to give back to the community in some way and they remain an active part of service,” she said.
Daher said many she has worked with are excited about retirement, but don’t know what they’re going to do in that chapter of their lives. Volunteering gives them much needed social interaction as well as a new identity and a continued sense of purpose.
“A hospital isn’t always the most fun place, so our volunteers can put a smile on a patient or their family’s faces and give them just a little bit of peace and comfort that we’re going to take good care of you. I think that goes a really long way,” she said. “I’m very thankful for the many volunteers that we have. They bring a sense of energy. They bring a sense of hope. They encourage people, and they’re here because they want to be here. It means a lot to them personally.
“With a volunteer like Ms. Lorene, we love having her knowledge and history of the organization,” Daher said. “But truly, it’s her passion for being able to help others that makes her so valuable.”
Look before you leap
If a retiree is thinking about going back to work, there are some things they need to take into account. An increase in income could affect taxes, Social Security benefits and Medicare healthcare plan eligibility.
Schramm suggested those contemplating a return to work polish their skills and utilize new strategies and technologies to make themselves attractive to recruiters.
Returning to work could actually improve Social Security benefits, John said.
“You are paying additional Social Security taxes while you’re working, and those are credited at the end of the year toward your benefit. Your benefit is adjusted upward,” he said “The later you start your Social Security benefits, the higher those benefits are going to be. And that is true up to age 70. Very few things are inflation adjusted. Social Security is. Your benefits are adjusted for the cost of living every January 1 with cost of living adjustments. Going back to work actually may have a significant value to your financial future. If you’re receiving certain types of public benefits there may be a negative impact for going back to work, but for the most part, financially it’s a very positive thing to do.”
Life to the fullest
For now, Guidry says he is enjoying the balance he has in his professional and personal lives. He has the fulfillment of a career, but is able to take time to enjoy life outside of work. In his free time, he still has the opportunity to travel the globe or make jaunts to nearby locales along the Gulf Coast.
“Over the last 10 years, we’ve been on more than a dozen cruises. We’ve been to more than two dozen countries. We are always doing something, and I want to do it while I’m young enough, have the wealth, and healthy enough to,” he said. “We went to Rome, and we walked the entire city and saw everything we wanted to see. All the time I see people say 'I’m going to have fun in the future,' and then they don’t get to. It has turned out to be a good choice for me.”