You are not alone. The pandemic pushed many people over the edge, so to speak. Newer and younger retires are joining the ranks of retreat in droves, and it is not because of involuntary unemployment either.
One reason for making such a critical decision to retire early, mostly without pre-planning, is their apprehension to return to workplaces that do not require wearing a mask, that lacks social distancing, supposed disinfecting and proof of vaccinations.
Over these many months, working from home has proven to be safe, more comfortable and creative for some, and more uplifting for those who loathe lousy coffee, idle gossip and office politics.
The unemployment toll on people 55 and older is the worst in half a century. Many are not counted in official employment statistics because even though they lost their jobs, they may have decided to retire or leave the labor force. Unfortunately, the majority of early retirees have not reached Medicare or full Social Security age.
Between March and April 2020, 10.9 percent of older workers fell into unemployment, compared with 8.9 percent of workers ages 35 to 54. The pandemic forced them, and even older workers who needed and wanted to continue working, out of their workplaces, quite possibly, for good.
Early voluntary retirement numbers range from 2 million workers every year since 2011 to 3.2 million between the third quarter of 2019 and the 3rd quarter 2020.
Today, hiring is at full strength. Candidates of varying ages, whether qualified or not, are accepting positions but failing to show up for work the next day. There are so many better offers out there – and signing bonuses for jobs that would have never been offered to candidates in the past. McDonald’s, for one, offered a $500 signing bonus in some stores.
And then, there is unemployment. At $600 per week, many Americans receive more money from unemployment than from their jobs. The Biden administration will end it soon. With unemployment benefits, you don’t get health care. You don’t build your pension up. You don’t build all of those programs that you need to move forward.
Clearly, this is not what “Mr. Wonderful,” Kevin O’Leary, from Shark Tank, had in mind when he coined: FIRE: Financial Independence Retire Early. Granted, some workers have a financial advisor to soften the blow for them. For example, Hefren-Tillotson clients are prepared for all eventualities, including job loss and other major challenges, with MASTERPLAN®, the plan that stays with you and grows with you for years to come.
How and When You Retire Should Be Your Choice
Currently, men retire at an average age of 64. Women retire at an average of 62. They want to retire but might not need to. Many retirees admit they don’t know what their retirement will look like. Granted, they have every right to design their retirement however they want to, but since retirement is a career-ending event, shouldn’t it be given the same attention as a career-starting event?
Most people start preparing and envisioning for retirement one-to-five years in advance. Through visualization, they think (or daydream) about what they’ll do with lots of time on their hands. With a spouse, they’ll think about activities they will do together and what new goals and routines they’ll both set in place. When you look at retirement as a process, you naturally develop a new purpose in life like a new career.
Retirement is a Life-Changing Event – Especially for Women
The original figure was over 2 million women who abandoned their careers in corporate America to take care of their children and their parents – the “sandwich generation.” Ask anyone who’s been there and done that and they’ll tell you how incredibly difficult it is.
To help other women balance their work and family responsibilities, their companies allowed them to take reasonable unpaid leave for certain family and medical reasons with the Family and Medical Leave Act (FMLA). Employers provided up to 12 weeks of unpaid, job-protected leave per year using their group health benefits maintained during the leave.
“When the workforce feels supported, they are fiercely loyal and generally more productive,” said Pamela Sutton-Wallace, senior vice president and regional chief operating officer at New York-Presbyterian, one of the largest hospitals in the U.S.
Whether or not women return to the workforce is based on how their situation progresses over time. However, some women feel the longer they stay away from work, the more they talk themselves out of going back full time, but will consider working part-time from home.
Whether full time or part time, getting women back to work is important for the recovery.
“We need to make sure if we’re going to have a strong recovery — a strong, equitable recovery — we need to get women back into the workforce,” Labor Secretary Marty Walsh said. The sheer numbers will tell the tale of women who’ve opted for retirement instead.
A stress-free retirement is one where your finances are in check. If they are not, contact us at Hefren-Tillotson today. Our top priority is to serve our clients – many of whom are second and third generation. And with six locations with dedicated financial advisors, we can be close to the clients we serve. We would be glad to help you wherever you may be.