Older Americans are not delaying retirement despite the pandemic
According to findings from Pew Charitable Trusts, even though Covid-19 complicated retirement decisions for many older workers, most are not planning to delay their retirement. The unemployment rate for workers over the age of 65 went up to 15.6% in April 2020, which was the highest rate on record. Nevertheless, Pew’s survey, which was conducted between May and June 2020, has found that only 16% of those who participated are planning to retire later than expected due to the pandemic, CNBC reported. In comparison, 12% of workers aged 55–58, 17% of those aged 59–62, 28% of those aged 63–67, 34% of those aged 68–70, and 26% of those aged 71–75 are planning to delay their retirement due to Covid-19.
IZA World of Labor author Andreas Kuhn has looked into the complex effects of retirement on health as knowing these is important for an optimal design of pension policies. “Retirement offers the opportunity to give up potentially risky, unhealthy, and/or stressful work, which is expected to foster improvements in retirees’ health. However, retirement also bears the risk that retirees suffer from the loss of daily routines, physical and/or mental activity, a sense of identity and purpose, and social interactions, which may lead them to adopt unhealthy behaviors,” he writes in his article. These concerns are even more prevalent in the ongoing pandemic.
The survey also found that a key factor that determines whether retirees meet their anticipated retirement on time is the amount of guidance they receive from their employer. For instance, those who said that they received less support were more likely to delay their retirements. The report also found that only 11% of those who are either working or retired had withdrawn extra money from their retirement accounts during the pandemic.
Interestingly, 64% of those who did answered that it was due to an unexpected expense and 14% said that it was relating to the ongoing pandemic. The report noted that the low withdrawal rates may have been helped by the amount of stimulus money Americans received through direct checks or unemployment benefits. The stock market’s recovery from the plunge could have also worked in favor of older workers’ financial situation.
Read Andreas Kuhn’s article The complex effects of retirement on health and find more content on Covid-19 and its impact on the labor market here and the aging workforce and pensions reform here.