People work to stay active after retirement, or so they are told.

Retirement looks different for everyone, but generally it means taking a step back from your work life. But the reality is very different for many retirees, who spend their retirement days working, the T. Rowe Price report found.

One in five (20%) retirees have returned to work, with a further 7% looking for work, the survey found. For retirees returning to work, financial and health-related benefits drive the decision, but the line between the two reasons may not be as clear-cut as you might think.

Why retirees return to work

The reason people are “not retiring” may be due in part to the high turnover rates seen during the pandemic, the report explains. According to a study by the St. Louis Fed, the pandemic led to 2.4 million excess retirements in which people left even though they had never previously intended to retire.

Some people return to work due to financial need. Of the retirees surveyed by T. Rowe Price, nearly half, or 48%, work for financial reasons, but a similar number (45%) say they work for the social and emotional benefits of employment. listed the benefits.

Most retirees do not need to work, but some do so out of necessity or preference. According to the same survey, 60% said they did not need to work and 12% said they were unable to work, while 10% said they had to work and 18% said they would like to work.

Most American workers plan to continue working after retirement.

More than half (55%) of people currently working in the United States expect to continue working after retirement, a recent survey by the Transamerica Retirement Research Center found.

Of those who plan to work after retirement, 80% cite health-related reasons and 78% cite financial factors. The most common concerns for healthy aging are staying active (50%) and wanting to keep the brain alert (42%).

According to 52% of workers surveyed, the biggest financial factor is simply the desire for income.

Finances drive retirees’ decisions to work more than health reasons

Sean Stone, a retirement planning counselor (CRPC) and director of advisory services for Retirement Planners of America, says that when people decide whether to work in retirement, finances matter more than they realize. told Investopedia that it may play a major role.

Retirees who are struggling to maintain their desired standard of living in retirement may want to return to work, even if that decision is due to healthy aging.

“We have to dig deep into that psychology.” [clients]” Stone said. “It might not be so much, ‘I just want to be active.’ It’s, ‘You said you can’t afford to spend $10,000 a year on your travel budget.’ I will earn that money and go on a trip. ”

Stone says that when clients are preparing to retire, they often worry about “fun things” like traveling or hobbies to stave off boredom, but that worry changes once they actually retire.

“Once you reach retirement, you hit the nail on the head and start thinking about health care costs, taxes, inflation and all the basics, and it seems like people are heading into retirement with more stuff on their plate. They’re feeling more euphoric than they should be,” Stone said.

Inflation raises concerns about retirement planning

When asked what their biggest concern is when planning for retirement, more than half of respondents in the HSBC survey cited inflation.

More than half, 54%, said they were worried that inflation would reduce the value of their retirement savings. Other financial concerns include rising medical costs and concerns about saving enough for a comfortable retirement.