Pandemic led to early retirement for many Americans — some voluntary, some not
It took a global health crisis to convince one of Gretchen Behnke's clients that she could retire early at 51, a move the woman finally took in February convinced her finances were good enough to last her golden years to be able to begin.
"She had been considering early retirement for about three years," Behnke, a certified financial planner in Plano, Texas, told Yahoo Money. "I think it was the pandemic that made her feel the insecurity of life and that she didn't want to spend more time in a job that was very stressful, was bad on her health and drained her energy."
Read more: Expert: Bond investors should embrace uncertainty as their new normal
She's not the only one. The unusual circumstances of the pandemic - the unexpected boom in stock markets, unprecedented job losses, the unique health threat to the elderly, and the loss of time with loved ones - all created an environment that led to early retirement for many. after a study couple.
Patsy Hahn, owner of Patsy's Potpourri of Gifts, in her shop. At Patsy's Potpourri of Gifts in Boyertown Thursday afternoon, February 4th, 2021. Patsy Hahn, the owner, is retiring and the shop is closing. (Photo by Ben Hasty / MediaNews Group / Reading Eagle via Getty Images)
According to a recent survey by MetLife, more than 1 in 10 baby boomers said the pandemic retired them earlier than expected, with nearly a third adopting a “life is too short” mentality and a quarter more time-consuming loved one or wanted to have more free time.
"Older people really face new challenges when it comes to retirement, retirement planning and how they perceive their financial future," Roberta Rafaloff, vice president of institutional income annuities at MetLife, told Yahoo Money. “You have these people who say, 'I've seen loved ones get sick, maybe I've seen loved ones die. Life is too short. I will use what I have today and retire. ‘"
Read more: How to get your retirement savings back on track
On the flip side, in a Federal Reserve study, 29% of adults who retired early due to COVID-19 were more likely to say that they were forced to retire or that no work was available, they didn't do their job liked or had to care for loved ones compared to other retirees.
"For people in negatively impacted industries - hospitality, etc. - their stories are very different if they are not financially or psychologically prepared," said Patricia Hausknost, a certified financial planner in Long Beach, California.
For example, a FedEx delivery worker in his early 60s, whose pre-pandemic goal was to retire at 65, said goodbye last November, just before the vacation rush, as the pressure and workload increased.
"The pace of work he was under was picking up," the man's financial planner Christopher Owens, a senior advisor associate at Wealthspire Advisors, told Yahoo Money. "[He] couldn't take it anymore physically and couldn't keep up."
For others, it was a combination of job loss and existential reflection that convinced them to retire early.
Another Owens client who "was always kind of scared of retirement" was fired from her job at a doctor's office last year and "the situation was pretty much decided for her," he said. Between the unemployment and lockdown measures, the downtime allowed her to gradually retire and spend time with her family instead.
(Credit: Federal Reserve)
While she was supported by unemployment insurance benefits, she also kept her expenses down, and Owens stated that she was "considering going back to work," but as time went on she "became more familiar with the idea of retirement," he said .
Likewise, Larry Harris, a certified financial planner in Asheville, North Carolina, who credits the pandemic for allowing him to open his imagination to retirement.
"I'm 67 and planning to retire," he told Yahoo Money. “The pandemic has created a unique opportunity to examine work from home and how it allows me to work longer at a different pace. [It] also gave me a glimpse of what retirement could look like if you don't go to the office every day. "
The Yahoo Money sister site Cashay has a weekly newsletter.
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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