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For one, older workers tend to get paid more or have outdated skills compared to younger workers.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.