During any period of great change, it is not surprising to see the effects ripple into many different areas of life. The pandemic is a great example of this concept. Not only has Covid impacted our healthcare system, schools, and employment; the effects have reached retirement planning as well.
In particular, an event called the Great Resignation prompted millions of Americans to leave their jobs. And among those were many in their fifties and sixties, who opted for an early retirement overlooking for new employment.
The reasons for early retirement differ for each individual, but analysts say that the following factors contributed for many:
- Health concerns related to covid and age
- Large gains in the market
- The sharp uptick in home values
- Federal stimulus money
- Expanded unemployment benefits
Aside from financial incentives and ability, many workers reported frustration due to the remote work trend, or alternately, a reluctance to return to the office. Some enjoyed a taste of retirement when the economy shut down, and realized they were ready to commit to a new lifestyle.
You might be wondering how so many workers in their fifties and sixties were able to suddenly retire. Are they living on Social Security? Actually, the Social Security Administration reported a significant decline of new claims last year! The statistics suggest that while many are opting for early retirement, they are not all filing for Social Security just yet.
That’s probably a smart move, since delaying a Social Security claim for a few years can result in a larger monthly check later. It is also possible that many of these early retirees just haven’t reached age 62, the earliest age at which you can claim Social Security. And perhaps some of them are still mulling over their decisions and might decide to re-enter the workforce.
If you’re considering an earlier retirement due to the pandemic or other reasons, give us a call. We can help you assess the health of your retirement fund, estimate your potential Social Security benefits, and make other important decisions regarding your retirement plan.