40% over 50 would not have retired or considered retiring

AARP research found that two in five workers, or forty percent of those aged 50 or older would not have retired, left a job, or even considered retiring had it not been for the coronavirus or COVID-19 pandemic. By October 2021actual retirements jumped seven percent higher than January 2020. 

Analysts at the Federal Reserve Bank of St. Louis discovered that the rate of retirements during the pandemic exceeded anticipated retirements among the baby boomers. By August 2021 there were over 2.4 million more retirements than anticipated. 

Call it the great resignation or a natural result of a worldwide pandemic. Either way, you slice it…

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older Americans either chose to retire or were forced to as a result of economic shutdowns or health risks from repeated exposure to the public. 

The Federal Reserve of St. Louis’ Institute for Economic Equity (IEE) found older workers with higher levels of income and education tended to remain on the job thanks to jobs that allowed for a remote work environment.

In August 2020 this show examined ‘involuntary retirements’. One of the impacts of the pandemic was undeniable- a surge in unemployment. In January 2020 the unemployment rate for those 55 and older was 2.6% By April 2020  unemployment surged 13.6% for the same group.

Will we see a great ‘unretirement’? That would be good news considering that the U.S. is facing an unprecedented labor shortage with over 10 million job openings. Market Watch columnists  Geoff Sanzenbacher and Matt Rutledge examined the history of individuals re-entering the labor force over the last four decades. For this, they turned to the Census Bureau’s Current Population Survey (CPS). The survey found the rate of retirees returning to work has remained relatively low even during economic recessions and expansions. Examining the CPS study they found unretirements averaged about six percent. 

One factor that can hasten many to return to work is inflation. Older Americans on a fixed income are seeing their purchasing power diminish more and more each month as the costs of goods and services continue to rise.

All this leaves reverse mortgage professionals in the unique position to help Older Americans in a number of ways. One is to assist those who wish to retire but are unable to due to cash flow constraints. Another are those who recently returned to work out of economic necessity but would prefer to exit the workforce. And not to be overlooked are retirees who will not return to work but who suffer the effects of inflation which reduces their standard of living.

The full impacts of the COVID-19 pandemic may not be fully understood for several years. What we do know now is older Americans need realistic solutions that provide a means to improve their monthly cashflow without the burden of additional payments for a line of credit or cash-out refinance.

What impacts on retirement have you seen as a result of the pandemic?  Leave your comments below.

Resources cited:

[AARP] Declines in Labor Market Participation Driven by Retirement Among Workers Ages 65 and Older

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