Although she’s officially retired, Amy Holler has rejoined the workforce.

“I didn’t want to go back to work, but I had to for financial reasons,” said the Long Island resident.

The 69-year-old former office supervisor has taken a part-time job as a school crosswalk monitor near where she lives in Valley Stream, N.Y. “I worked a few temp jobs before I found this position,” Holler told Financial Advisor magazine.

Holler is among the recent retirees who have gone back to work. New research from T. Rowe Price finds that 22 percent of recent retirees have rejoined the workforce, 9 percent are actively looking for work after having retired and 18 percent are earning at the same level as before they retired.

“Boomer retirees are working in different capacities, such as part time and as independent contractors or consultants, in order to earn extra money,” said Anne Coveney, senior manager of Thought Leadership, the research arm of T. Rowe Price that uncovers investor trends and behaviors.

T. Rowe Price revealed its study findings at a press breakfast recently at The Westin New York Times Square. “We’re seeing the first generation of retirees who have some accounts beyond just a pension,” Coveney said. “They may have pensions as well as 401(k) plans, but the pensions are not as much of a source of income as in previous generations.”

After 2.7 years in retirement and at an average of 66 years old, early retirees are living on 67 percent of their pre-retirement income, the research shows.

“It’s a good sign,” said Coveney. “It indicates that they are planning for many years in retirement.”

However, many are not tapping into their 401(k) plans or IRAs immediately. Some 51 percent have a formal withdrawal plan, and of those who are making withdrawals, 11 percent are withdrawing 1 percent, 9 percent are withdrawing 2 percent and 7 percent are equally withdrawing 3 percent and 4 percent.
 
“They are not taking out much money because it’s early in their retirement,” Coveney said. “As they get further along, their situations might change in terms of health care, so they do need a withdrawal plan because they will need that money.”

With 18 percent of household income coming from pension plans, 42 percent from Social Security and 17 percent from retirement accounts, including 401(k) plans and IRAs, there’s an opportunity for financial advisors to create formal withdrawal plans for their retired and pre-retiree clients. “It’s a new area for financial advisors to tap into,” said Coveney.

Financial advisor Bob Gavlak creates a formal withdrawal plan for his clients as part of an overall financial plan and includes a strategy for turning on different income streams, a detailed financial breakdown of the first five years of retirement, overall budget recommendations and a first-year withdrawal rate.

“This is important because one threat to a successful plan is a major downturn in the stock market at the start of retirement, and if we know the first-year withdrawal rate, we can better understand how much exposure the client has to a downturn,” said Gavlak, a Certified Financial Planner with Strategic Wealth Partners in Columbus, Ohio.

Those who are making withdrawals withdraw on average 5 percent and those who withdraw on an ad hoc basis do so mainly because they live on social security income, which puts them at a disadvantage in the long run.

“Having a strategy in place early on gives a retiree time to decide if that plan is adequate,” said Gavlak. “If you wait until the month before retirement and find your assets cannot support your lifestyle, it may be too late to make any adjustments to your withdrawal plan.”

Some 63 percent withdraw from their IRAs or 401(k) plans on an ad-hoc basis, even though establishing a formal withdrawal plan within the first couple of years in retirement is ideal.
 
“Ad-hoc withdrawals add up, and your account dwindles much faster than you may have hoped or anticipated,” Gavlak said. “With a withdrawal strategy in place, retirees are forced to live within a certain budget, much like during working years when there was a set paycheck.”