(The Motley Fool) - It's a choice many people are contemplating these days in particular.
Many people who retired a year ago are starting to regret that decision as inflation has driven living costs upward to an extreme degree.
And it's not just recent retirees who are struggling with higher living costs. Some seniors who have been managing for years are now finding themselves unable to make ends meet.
Of course, inflation isn't just a problem for retirees. Working families all over the country are struggling as a result of higher food, utility, and rent costs, to name a few.
But retirees might struggle uniquely with inflation because they're truly on a fixed income. And those looking to stretch their nest eggs a good 20, 25, or 30 years may not be comfortable with the idea of simply increasing their withdrawal rate to cope with higher expenses.
If inflation is stressing you out, you may be contemplating going back to work, even if you've been retired for quite some time already. But do you need to go to that extreme? Or are there other solutions to look at?
When money gets uncomfortably tight
If you're rapidly depleting your nest egg over higher living costs, and your monthly Social Security checks just aren't cutting it, then you may be inclined to go back to work on a full-time basis. If you're healthy enough to do so, that's not necessarily a bad thing.
Working full-time for a few extra years could help you nicely pad your nest egg, all the while serving the very important purpose of leaving your existing savings alone. And you might benefit in other ways, such as spending less on utilities by virtue of not being home all day.
But before you rush to go back to work full-time, you may want to look into part-time work instead. Going back to work for 40 hours a week could constitute a shock to your system if you haven't held down a job at all since retiring. And it could end up being more of a physical and mental strain than you're able to easily manage.
Imagine you're 68 years old and you retired at 65. Your long commute into the city may have been manageable then. But three years later, you may find that your body just doesn't handle it well. And mentally, you might struggle to transition from a completely open schedule to one that has you plugging away at a desk for 40 hours a week, or possibly more. These are things to think about before you decide to pull the plug on retirement completely.
Run the numbers
Rampant inflation may be stressing you out to such an extreme that you're thinking of unretiring. But before you do that, crunch the numbers and see whether a part-time job could be the solution to your financial woes.
You might also manage to find some creative solutions that make it so you don't have to completely unretire. One option, for example, is to monetize your home by renting a portion of it out if you have a decent amount of space. And if you don't want someone living under your roof, you can see about renting out a parking spot in your driveway.
All told, unretiring isn't a terrible idea if your savings are shrinking and you're growing increasingly nervous by the day. But there may be a middle-ground option worth exploring before you go that route.
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By Maurie Backman
September 20, 2022
