COVID-19 has some older workers rethinking retirement
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The economic outlook right now is uncertain, if not outright grim. A lot of groups are experiencing the financial consequences of the coronavirus pandemic differently, including older workers.
Lynne Lippmann is a clinical research specialist in St. Louis. Because of the pandemic, the university where she works needs to cut costs. Some people were furloughed, and Lippmann will have her hours reduced by half.
“When they cut the hours, one of the things we discussed was transitioning that over the next few months to retirement,” Lippman said. She’s 70 and was already planning to retire later this year. “It’s sort of just speeded up the process a little bit.”
People 55 or older make up about 1 in 4 workers in the labor force today. And, so far, they’ve experienced fewer job losses compared to their younger counterparts.
“Historically, older workers have been less likely to lose their jobs than younger workers,” said Richard Johnson, director of the program on retirement policy at the Urban Institute. “Older workers have more seniority that does tend to protect them.”
That’s the good news for older workers, but Johnson said when they do lose their jobs, “their unemployment durations are very long.” Johnson said during the Great Recession, people 62 or older who were laid off were much less likely than younger workers to ever get another job.
And that created another trend.
“There was a huge spike in 2008 and 2009 in people claiming their Social Security benefits early, right at 62, or just whenever that job happened to disappear,” said Matt Rutledge, a fellow at the Center for Retirement Research at Boston College.
Meaning people chose to take a smaller Social Security check for the rest of their lives rather than face months or years of potentially fruitless job searching.
And Rutledge expects another big surge in workers forced into retirement this year. Today, those that still have their jobs can find that even carefully planned retirement strategies may need revising given all the market turmoil.
“When they see their accounts fall down in value, it’s something that they really worry about whether or not they’re going to be able to retire the way they want or whether or not they can stay retired,” said David Amann, a financial adviser with Edward Jones.
So he’s checking in and reviewing plans.
“Asking them how much longer would we have to work in order to live the retirement we want, or what sacrifices would we have to make to retire now,” he said.
He’s encouraging them to make choices while they still have options.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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