3 Signs You Should Return to Work After Retiring Early

Key Points

• Some people work hard to achieve an early retirement, only to have it not work out as planned.

• Returning to work after retiring early isn't automatically a failure on your part.

• It pays to consider working again if you have financial concerns or are just plain unhappy.

A 2024 report by AARP found that about 20% of Americans ages 50 and over have no retirement savings. And not so surprisingly, 26% of current workers say they don't think they'll ever retire. But if you save very well for your later years, you may end up in the opposite boat, where you can not only retire with confidence, but do so well ahead of your peers.

That doesn't mean early retirement is guaranteed to work out the way you want it to, though. And there may come a point when it pays to consider returning to work after retiring early. Here are some signs that you may be in that situation.

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1. You're depleting your savings at a faster rate than expected

Financial experts generally tell retirees to expect their savings to need to last 30 years. But if you retired ahead of the game -- say, in your early 50s -- you may need to stretch that money for an extra decade beyond that general recommendation. So if you've been spending down your money faster than expected, it's a sign that you should consider going back to work.

Remember, inflation has been annoyingly elevated these past few years. If you retired a few years ago, you may have expected things to cool off by now. But the fact that they haven't means you may not be in as strong a financial position as anticipated. If so, returning to work for a few more years could give you more long-term financial stability.

2. You're realizing an early retirement will force you to take a Social Security benefits cut

You may have retired early with the intent to stretch your nest egg and leave your Social Security benefits unclaimed until full retirement age. Doing so is your ticket to avoiding a lifelong reduction in those monthly checks.

But if your costs are higher than expected and your savings are dwindling, you may be looking at two choices: returning to work for a period of time, or having to claim Social Security early and slashing your monthly benefits for life.

While neither may be ideal, the latter -- resigning yourself to smaller Social Security checks -- could be truly detrimental to your retirement finances. Returning to work may be the less painful option in the long run.

3. You're bored with your new routine

People who retire early commonly expect to enjoy their new routine -- otherwise, they'd keep working. But retirement has a way of being surprisingly boring.

You may not realize it until you're in the situation, but if you're the only member of your peer group who's retired, you may find that you're spending your newfound free time alone. And you may be growing less and less content by the day.

If that's the case, there's no sense in forcing yourself to remain retired just for the sake of it. You might as well find yourself a job that sounds interesting or meaningful and plug away at it -- if not on a full-time basis, then at least part-time.

There's nothing wrong with unretiring

If you retired early, you may view a return to work as a failure on your part. But that's not a productive line of thinking.

It's hard to predict how an early retirement will work out until you're actually in the midst of it. And a few years back, most of us couldn't have predicted that inflation and living costs would remain stubbornly elevated for such a long time.

Returning to work for a few years after retiring early could be your ticket to more financial security. And it may even be a good move for your mental health. So there's no reason not to explore your options for getting a job, whether by returning to your former field or trying out something new and exciting.

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