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Will Coronavirus Force You Into Early Retirement?

Category: Work and Volunteering

June 30, 2020 — Over a third of baby boomers say they would like to delay retirement, perhaps into their late 60’s or even later. The problem is, however, more actually retire much earlier. According to the Schwartz Center for Economic Policy, just over half of the workers who retired between 2014 and 2016 did so involuntarily, for a variety of reasons. The onset of the coronavirus pandemic is exaggerating this phenomenon, forcing even more people off the job before they want to.

Millions of Americans have been laid off or furloughed from their jobs due to the shutdowns and economic chaos caused by the virus. Many of those will eventually find their way back on the job, or perhaps already have. Others might not want to return to work, either for fear of getting infected or because their attitude toward work has changed. Whatever their decision, the problem of getting back on the job for older workers is difficult for a host of reasons.

For one, older workers tend to get paid more or have outdated skills compared to younger workers. So if a particular workers is not going to be rehired, it might be someone on the other side of 50. Employers also fear that older workers are more vulnerable to the virus and therefore might be in greater danger, or need stronger protections the employer cannot provide. Whether it is legal to discriminate against older workers for these reasons is a tricky question.

Business owners affected

Many working adults own their own businesses, either as a full or part time venture. If that business happen to be in tourism, food, transportation, or hospitality, it might be in trouble right now. Faced with no or greatly reduced income and continuing expenses, self-employed boomers might have no choice but to shut down and take earlier than planned retirement.

Retiring early causes other problems

Many people stake out a date for their retirement and plan accordingly. Their retirement savings are targeted to be a certain level by then, with their Social Security income based on retiring at a particular age. Retiring early means not only that savings don’t hit the target, but they get tapped earlier too. Social Security might have to be claimed earlier than planned. And, if that early retirement comes before age 65, it also means scrambling to find and pay for private medical insurance outside of Medicare.

What can you do?

If you are newly unemployed because of the coronavirus you might not have too many good options. Perhaps you can work from home and alleviate the fear you will get exposed to the virus on the job. If you do lose your job, you need to secure your health care coverage via COBRA, the ACA, or Medicare. You might need to make some decisions about taking your Social Security – do you have savings you could live on in order to push back when you claim, and thus get a higher benefit? Perhaps networking cna help you find a new source of employment, or start a part-time business that is pandemic-proof. The situation is going to be very difficult for many.

Comments? Have you been laid off or furloughed due to the pandemic? Do you have any suggestions on the issues to be concerned about, and how to cope? If so, please contribute in the Comments section below.

Note: The NY Times article, “The Pandemic May Lead Many to Retire Early” has some additional helpful information on this topic.

Posted by Admin on June 29th, 2020

5 Comments »

  1. Actually no, not early, but later. This has stopped us from purchasing our next home because of the economy. Some of the minor fix-up work on the home we are selling is on hold as we aren’t ready for strangers to be working inside our home. If the economy crashes further, I’d rather live in a paid for residence than one I’m just starting to pay for or have just purchased (not sure how we will proceed yet). Also working a couple more months may help recover some of the money lost in the stock market drops.

    by Dave C — June 30, 2020

  2. I’m 70 years old, retired, and at 59 years of age I decided to retire. When I retired, I was replaced by the assistant I trained for 10 years. She did not have a college degree, but had abilities I saw and developed. Prior to my accepting the Senior Management Position I held with the organization, she was not given the opportunity to advance in her career. She was earning a salary of $23,000 a year, when I left she was earning $62,500 a year. For five years I fought to advance her even more and I was not given the support of our HR professionals because the “job description” and “job requirements” mandated a college degree. To eliminate this roadblock, during my last year of employment I rewrote the job descriptions and eliminated the requirement for a college degree. On my last day of employment, I had the honor to recommend her for advancement into a higher position with a salary of $110,000…she remains in that position today. My point here is that sometimes we as managers let the system do what the system does and fail to do our job of protecting the most valuable resource a company has, that being talented people. On another note, I am proud to say that also on my last day of employment I saved the company $110,000 resigning. My position paid $220,000 a year, and I retired the TITLE and MINIMUM JOB QUALIFICATIONS for my position, which then opened the opportunity for my qualified and highly skilled assistant. A win-win for both and an accomplishment I am very proud of. On an ending note, SHE is a minority with only a high-school education, but her real qualification is 25 years of experience and advanced internal training.

    by Bruce M — July 1, 2020

  3. Good for you, Bruce! You sound very proud of what you did and with good reason. I applaud you!

    by ella — July 1, 2020

  4. I second the kudos, Bruce. It’s easy to be the company manager — more difficult to find ways to work around for the benefit of both employees and company.

    by RichPB — July 2, 2020

  5. I am 66 and work as an RN in a psychiatric hospital with no COVID patients. My husband is older and is a college professor. We both faced financial cutbacks with COVID. For me, the hospital stopped adding to our pension ($ for 2021 plus interest) to avoid layoffs. For my husband, the university is making all employees furlough for 25 days in 2021. It is better than not having a job but it will impact our retirement. There are others that are in worse situations but it is still impacting our bottom line. One more thing–being furloughed when we cannot travel to see our grandkids is the worst. Our daughters are a doctor and nurse working with COVID patients. They do not want us near them (or the grands) because they fear it will literally kill us. They have made it clear they do not want that responsibility which is difficult given we traveled EVERY MONTH for a long weekend to see them since the grands were born or they traveled to see us. That is the saddest part of all.

    by Joanne — July 2, 2020

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