In 2022, comedy fans the world over were disappointed to hear that Jim Carrey, one of the true masters of the form, had decided to retire shortly after the release of Sonic the Hedgehog 2.
However, just two years later, Sky reported that Carrey had come out of retirement to make the third instalment of the same franchise, quipping that he “needs the money”.
While Carrey’s definition of needing money is likely somewhat different from most, his decision to “unretire” speaks to a wider trend of people coming out of retirement and returning to the workforce.
Indeed, according to a 2024 report by Legal & General, around 2.8 million UK adults over 50 have returned to work after retiring. Of the people who unretired, the report found that:
- 62% wanted to stay mentally active
- 37% needed a higher income to cope with increased expenses
- 32% enjoyed the sense of purpose work offers.
So, if like Jim Carrey or millions of over 50s, you are considering unretirement, read on to find out about four key factors to consider before doing so.
1. Your retirement fund
It’s safe to say that most people could comfortably retire on Jim Carrey’s financial resources. However, the actor himself seemingly felt otherwise – though, in typical Jim Carrey fashion, his remarks may have been more tongue-in-cheek than serious.
Whatever your financial situation, before deciding to unretire it’s important to assess how your retirement fund has performed since you stopped working.
Has your income from your pension been sufficient to maintain the lifestyle you desire? Or have you found it challenging to stick to your budget? There may also be new factors that have increased your expenses, such as the arrival of a grandchild or additional care needs within your family.
Returning to work means you can continue contributing to your pension. This not only helps to further grow your retirement fund but also reduces the number of years you’ll need to rely on it, meaning you could considerably boost your pension with modest contributions across only a few years.
Even returning to work part-time could make a significant difference to your pension pot. For instance, PensionsAge reports that working just one day a week for a few years after reaching retirement age could add as much as £71,000 to your fund.
Moreover, unretiring gives you the opportunity to defer your State Pension, which could be beneficial, depending on your situation.
However, since deferring means you’ll receive your State Pension for a shorter time, the overall financial benefit will depend on factors like your life expectancy and income. So, it’s a good idea to speak with a financial planner to map out the potential benefits and costs of deferral.
2. You may trigger the “Money Purchase Annual Allowance”
If you plan to resume making pension contributions to boost your retirement fund when you return to work, it’s worth considering your “Annual Allowance”.
Your Annual Allowance limits the amount you can contribute to your pension each year without incurring an extra tax charge. For the 2024/25 tax year, it stands at £60,000.
However, if you’ve accessed a defined contribution (DC) pension flexibly, you’ll trigger the “Money Purchase Annual Allowance” (MPAA). This reduces your Annual Allowance to just £10,000, for the 2024/25 tax year.
So, if you retire and begin drawing an income from your pension, and later unretire, you may find that you’re unable to make as many tax-efficient contributions as you did before.
3. Your mental and physical health
Jim Carrey is known for bringing a comedic physicality to his roles. So, now that he’s reaching his older years, he probably has to think twice before jumping into some of the more strenuous postures he’s held over the years.
While your ability to continue clowning may not be on your list of considerations, there might be other aspects of your physical health worth checking before you decide to unretire.
For instance, returning to work may entail sitting for long periods of time, which might have been manageable a few years ago, but now may be more uncomfortable.
Beyond your physical health, it’s also important to consider your mental wellbeing before opting to unretire.
According to data from the Office for National Statistics, 46% of people aged 50 to 65 who left or lost their jobs during the pandemic expressed a desire to return to work because of the social interaction their job provided or simply because they enjoyed the work itself. Meanwhile, 42% believed that resuming work could have a positive impact on their mental health.
So, if you’re considering unretiring, think about how returning to work could affect not just your finances but also your wellbeing and overall health.
4. There may be goals you struggle to achieve if you’re working
Returning to work can provide a helpful boost to manage your living costs and build additional savings for the future. However, it’s important to consider how unretiring might affect your ability to achieve your life goals.
For example, if you envisioned travelling the world or spending more quality time with your family during retirement, continuing to work could make these plans harder to realise.
So, it’s a good idea to try and balance the financial and health benefits of returning to work with your personal aspirations. By weighing these factors carefully, you can make a decision that aligns with your financial stability, health, and long-term goals.
Get in touch
Whether you’re planning to enjoy a well-earned rest or considering following Jim Carrey and returning to the workforce, our team of independent financial advisers in Lewes is here to support you throughout your retirement journey.
To find out more, please get in touch by emailing us at financial@barwells-wealth.co.uk or by phone on 01273 086 311.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.