If you're imagining that once you wave goodbye to your pointy-headed boss and head off into the sunset, you'll live out the rest of your life in blissful retirement, think again. That's not how it's working for many people. It turns out that many people are returning to the workforce after retiring -- some by choice, and some not. Heck, even a 67-year-old woman in Spain recently gave birth to twins. Our 60s are not turning out to be like our parents' 60s.

Un-retiring, by choice
Why would anyone un-retire by choice? Well, for several reasons. For one thing, retirement may end up being not all that the retiree expected. Boredom can set in! That happened to Vinita Weaver, 80. As the Fort Worth Star-Telegram explained, Weaver worked in the retail clothing industry for 43 years before retiring at age 78:

"First she caught up with all those little chores she'd been meaning to do. That consumed two or three months. Then she sat. And fidgeted. And got bored. And as to the cash flow from sitting, there wasn't much. Weaver not only enjoys selling and meeting new people, she also likes the constant learning so necessary in today's competitive world."

So at age 80, she began pursuing a real estate license and preparing for a new career.

She's not alone. There are more older workers toiling away now than ever (more than twice as many as in 1984), with the Bureau of Labor Statistics noting that 36% of those 56 or older are still working. That's the highest level recorded since 1972. Relatively low unemployment rates are one factor driving this trend -- the jobs are out there.

Un-retiring, not by choice
Sadly, though, some retirees want to stay retired but find they can't. One reason is that, in general, people are entering the workforce later than in past generations (because of schooling) and are living longer. That results in longer retirements, which cost much more to support. On top of this, health care is costly, and it's getting more so each year.

Imagine that you're 50 and have saved $200,000 for your retirement. That might make you feel pretty smug -- and it is much more than many people have saved. But let's look more closely. If you're planning to retire in 15 years, at age 65, and you expect your money to grow at an average annual rate of 12% (which is ambitious, as the stock market's average annual growth rate is closer to 10%), then you'll end up with $1.1 million.

In our Rule Your Retirement service, I learned that to make your nest egg last, you should conservatively plan to withdraw about 4% of it per year in retirement. So 4% of $1,100,000 is nearly $44,000, or roughly $3,650 per month. Will that be enough? For many people, the answer is a resounding "yes." For many others, it's "no, not at all."

Meanwhile, remember that most people aren't at $200,000 by age 50. According to the folks at the Employee Benefit Research Institute, more than half of workers 45 to 54 have saved less than $50,000 for retirement. If you're 50 and your $50,000 earns the market average of 10% over the coming 20 years (let's say you retire at 70), it will become just $336,375, enough to provide you with just $13,000 or so in annual income, if you're withdrawing 4%.

On the bright side ...
Fortunately, all is not lost. If you're biting your fingernails now, stop. You have ways to improve the rest of your life.

  • Simply save and invest more, regularly. Remember that the earliest dollars you invest have the greatest chance of significant growth.
  • Invest more effectively. If you've been sticking to CDs and bonds, know that you can probably do much better over the long haul in stocks. Take some time to learn more about your options, and consider taxes, too. It's often smart to max out IRAs (especially the Roth IRA) and 401(k) accounts.
  • Consider investing in mutual funds designed with target retirement dates in mind. The T. Rowe Price Retirement 2035 (TRRJX) fund, for example, is meant for those planning to retire in 2035 and is invested in a range of other T. Rowe Price funds that focus on growth, value, income, bonds, and so on. Some 27% of it is in T. Rowe Price Growth Stock (PRGFX), which is invested in the likes of Schlumberger (NYSE:SLB), Kohl's (NYSE:KSS), and Google (NASDAQ:GOOG). Another 23% of the 2035 fund is in T. Rowe Price Value (TRVLX), which is invested in companies such as First Horizon National (NYSE:FHN), Home Depot (NYSE:HD), and Total SA (NYSE:TOT). So you can see how target funds offer a simple way to achieve instant diversification.
  • Remember that you may be able to count on some income from Social Security, and you may have some other assets, too, such as your home.
  • Consider retiring a little later than you planned. Giving your money a few more years to grow can make a huge difference.
  • Start thinking now about how you might want to live in retirement. Prepare yourself for the possibility of holding at least a part-time job and think about what kinds of jobs appeal to you. AARP regularly publishes lists of the best employers for older workers, and some include CVS (NYSE:CVS), Deere, and MetLife.

Also, don't go through all of this thinking and planning alone. Seek some help. For retirement guidance, I refer most often to Robert Brokamp's Rule Your Retirement service. You can, and should, try it for free for a whole month. Doing so will give you access to all of the past issues, which feature a host of "Success Stories" profiling people who retired early and are willing to share their strategies. Robert also recently published the anniversary issue, titled "8 Steps to Ruling Your Retirement," in which he spells it all out for you -- start to finish. It'll cost you nothing, there's no obligation to subscribe, and I'm pretty sure you'll like what you see.

And here's to un-retiring by choice, and not by force!

This article was originally published on Feb. 2, 2007. It has been updated. 

Longtime Fool contributor Selena Maranjian owns shares of Home Depot. For more about Selena, view her bio and her profile. Home Depot is an Inside Value recommendation. Total SA is an Income Investor selection. T. Rowe Price Growth Stock is a Champion Funds pick. The Motley Fool is Fools writing for Fools.