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After being laid off, Andrea, 64, faces a difficult choice: find a job or start collecting Social Security.
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Many older Americans rely on Social Security in retirement and struggle to pay their bills.
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About 13% of baby boomers on LinkedIn were “not retired” by 2023, a five-year high.
When Andrea, 64, was laid off in February, she joined many older Americans who are unexpectedly re-entering the workforce.
She spent decades climbing the corporate ladder at various staffing and recruiting firms in Minnesota’s Twin Cities, taking on leadership roles and earning six-figure salaries. She planned to continue working until she reached retirement age at age 67.
Now Andrea — whose identity is known to Business Insider but is asked to use her first name for privacy reasons — is weighing her options. She’s thinking about getting Social Security benefits sooner than she originally thought, but she’s concerned about the long-term savings and would prefer to get another job.
“I would really have to make some major paradigm shifts in my life to keep from digging into retirement,” she said. “I would have to become super frugal, and I would rather work.”
Decisions about when to stop working and take Social Security have become a cornerstone of the retirement experience. Older Americans become eligible for Social Security at age 62, or they can wait until their full benefits start at age 67. Monthly Social Security checks, which averaged $1,924.35 in October, are the main source of retirement income for many baby boomers. But that’s often not enough unless it’s supplemented with other savings, such as a 401(k) or investments.
Business Insider has heard from more than 1,000 baby boomers who regret retirement. Many wish they had waited to receive their maximum Social Security benefit, while others retired early for reasons beyond their control. For people like Andrea, a layoff later in life can derail their best financial plans.
We want to hear from you. Are you an older American with one regret in your life that you would like to share with a reporter? Please fill this in fast shape.
With her retirement decision looming, Andrea feels like she is “walking a tightrope” between starting her retirement and potentially outliving her savings. She said her husband, a retired lawyer, receives several thousand dollars a month between his Social Security checks and his pension. Andrea estimates her benefits would be just over $2,000 a month if she were to retire now – and she doesn’t think that’s enough to live on.
She said paying for her family’s 24-year-old son’s mortgage, insurance, car payments, health care and college tuition adds up quickly. She and her husband don’t want to dip into their 401(k), Roth IRA or investment accounts until absolutely necessary.
Doug Ornstein, director of asset management at TIAA, told BI that unexpected costs or layoffs are a common source of financial worry for hopeful retirees.
“Most people’s greatest fear is that they will run out of money and not have the dignity to support themselves in their old age,” Ornstein said.
About 13% of baby boomers on LinkedIn returned to the workforce, or “non-retired,” in 2023, a five-year high, according to LinkedIn’s Economic Graph. A 2020 Federal Reserve analysis of the U.S. Economic and Household Decision-Making Survey found that 14% of non-retired adults facing a layoff borrow money or cash out from their retirement savings.
Andrea wishes she knew that her choice to be a stay-at-home parent while her son was a toddler – and to work in the UK a decade earlier in her career – would negatively impact her social security income. The benefits only take into account years spent actively in the U.S. workforce.
She added that age discrimination in the workplace makes it difficult for her to be rehired, despite her years of experience. She hopes that landing a new role will help her raise the approximately $5 million she wants to have saved to retire comfortably.
Andrea advises others to start saving for retirement in their twenties or thirties.
“Even if I get a new job, I will save as much of that income as I can,” she said. “Because I feel like my position is not as strong as it should be.”
Do you have to go back to work after retirement? Would you be comfortable sharing your experience with a reporter? Please contact allisonkelly@businessinsider.com.
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