Retirement & the COVID-19 Pandemic
The past year and a half brought about significant life changes for many of us. For some, it meant entering retirement earlier than expected. Recent data shows more people retired this year than anticipated. According to the Schwartz Center for Economic Policy Analysis, 2021 saw a retirement boom:
Retirement Boom: “At least 1.7 million more older workers than expected retired due to the pandemic recession.” Older workers faced more health risks and disproportionate job loss during the pandemic; thus, many were pushed into unplanned retirement earlier than they would in a typical year.
Retirement Inequality: “At earlier ages, vulnerable workers retired sooner, while more privileged workers delayed retirement. The share of retired workers among adults aged 55-64 rose 5% for those without a college education, but fell 4% for those with a college degree.”
While older adults without college degrees retired in greater numbers, the average worker in this group was not prepared financially for retirement, leaving them at a higher risk of poverty or near-poverty in retirement.
Racial Inequality: “Black workers without a college degree experienced the highest increase in the share who are retired before age 65. This rate rose 1.5% from 16.4% to 17.9% between 2019 and 2021.
While the rate of older black workers who were pushed into early retirement is higher than older white workers among those who are not college educated, among college-educated workers, the retirement rates for older black workers decreased at all ages.
Early retirement as a result of the pandemic can have some negative impacts, particularly financially. If older workers were not prepared for retirement they may not have the savings required to retire comfortably, or they may not be mentally or emotionally ready to leave the workforce. While there are drawbacks, there are also positives – like more freedom to move closer to loved ones or travel.
You Can Move Closer to the Ones You Love
The 2021 Home Buyers and Sellers Generational Trends report from the National Association of Realtors (NAR) provides a look at the reasons people buy homes. For those reaching retirement age, the number one reason to buy is the opportunity to be closer to loved ones, friends, or relatives.
If you find yourself farther from your loved ones than you’d like to be, retirement and the equity you’ve built in your home may enable you to move closer to the people in your life who matter most.
You Can Find the Right Home for Your Needs
If you’ve recently retired, your home may not fit your new lifestyle. The good news is, you’ve likely built-up significant equity that can fuel your next move. According to the latest Homeowner Equity Insights report from CoreLogic, homeowners gained more than $50,000 in equity over the past 12 months alone. That, plus today’s sellers’ market, presents a great opportunity to sell your house and address your evolving needs.
Whatever your home goals are, we can help you to find the best option for your situation – from helping you sell your current home to guiding you as you buy your next home and transition into this new phase of life.
If you’ve recently retired and your needs are changing, you’re not alone. Reach out any time – we would love to support you as you make this transition and have an incredible network of resources and vendors who can help, as well.