How Did the Pandemic Affect the State of Retirement?

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.

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

How Did the Pandemic Affect the State of Retirement?

How Did the Pandemic Affect the State of Retirement?

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About the Author: Mark Roberts