After a year or more of job losses or underemployment due to the pandemic and lockdowns, older adults may be looking at retirement very differently.
The current full retirement age set by the Social Security Administration is 66 years and 2 months for adults born prior to 1955. It gradually increases for those born between 1956 and 1959, and then for adults born in 1960 or later, the full retirement age is 67. (Source: AARP)
The pandemic forced older adults to leave the workforce in greater numbers, due to multiple factors: increased health risks in exposure to the virus while on the job; greater difficulties in adopting technologies for work-from-home; or their positions being cancelled by the company for any number of reasons.
According to the AARP in October 2020, this was the first time in 50 years that older adults experienced greater joblessness than mid-career workers. And for many of those left unemployed during 2020, their jobs have not returned and may never return.
So what does this mean for retirement? A significant number of older adults left unemployed or underemployed during the pandemic—and during its lasting effects into this year—may have had to rethink retirement plans. But what does that mean exactly if one has lost employment?
Pensions may be reduced, or Social Security benefits may have had to be collected earlier than planned, or a reduction in lifestyle may be necessary. For some, it means moving in with other family members or downsizing on the home earlier than planned in order to save on finances.
Those who may be trying to return to the workforce are finding it more difficult than ever to do so. Pre-pandemic, it was often difficult for older adults to find stable, meaningful employment. Now, it’s even harder, and still comes with health concerns and risks for some. This creates a lasting impact on financial security during retirement years. Remember, retirement does not always mean those years in which a person voluntarily rests and relaxes after working for so many years; it may also mean those years in which a person cannot work due to age or health reasons and must rely on those savings earned during the working years and programs designed to help older adults.
If you find yourself or a loved one is facing financial insecurity due to job loss and are over the age of 55, talk to a qualified financial planning professional for advice on how to retire with more security.