More retirees return to work as high costs strain budgets

Retirement is becoming a detour for many older Americans as the math on housing, healthcare and everyday expenses keeps getting harder to manage. An AARP survey found that 7% of retirees had returned to work in the past six months, and 48% of those who went back said they needed money or faced a poor economic outlook.

The survey points to a shift that looks less like a lifestyle choice than a financial necessity. Smaller shares of returnees cited boredom, 15%, or helping others, 14%, suggesting that earnings, not extra purpose, are driving most of the movement back into the labor market. AARP said the pattern has stayed fairly steady, with 6% reporting a return to work in summer 2025 and 7% in winter 2025.

For many older workers, the return comes in reduced hours rather than a full-time job. The U.S. Bureau of Labor Statistics said 38.3% of employed people age 65 and older worked part time in 2024, far above the shares for workers ages 55 to 64, at 14.2%, and ages 25 to 54, at 11.1%. That part-time pattern helped push the labor force participation rate for people 65 and older to 19.5% in 2024, with about 11.6 million people in that age group in the labor force.

That participation rate is still well below the modern high-water mark for older Americans, but it has climbed sharply over the long run. BLS data show the rate bottomed at 10.8% in 1985. The longer arc matters: more people are staying on the job longer, yet recent research suggests the post-pandemic recovery among older workers has been incomplete.

Researchers at the Federal Reserve Bank of San Francisco estimated that workers age 55 and older remained nearly 2 million below pre-pandemic participation trends, with the gap concentrated among people without a college degree. The U.S. Government Accountability Office found the unemployment rate for workers ages 55 to 64 peaked at 12.6% in April 2020 and returned to 2.2% by April 2023. It also found retirement account balances held relatively steady during the pandemic, while Social Security claiming initially fell and then rose above pre-pandemic levels in late 2020.

Taken together, the numbers show a retirement system under strain. For many older Americans, unretirement is no longer about staying busy. It is becoming a way to cover essentials that pensions, savings and Social Security no longer fully meet.