Affluent Americans rush to retire in Covid times
Going back to the daily grind may prove a tough proposition for many people
After a year of early-morning Zoom calls, the spectre of a deadly virus and soaring stock and real estate values, working American baby boomers plan to get out while the getting's good.
About 2.7 million Americans aged 55 or older are contemplating retirement years earlier than they'd imagined because of the pandemic, government data show. They're more likely to be White, a group that typically has a larger amount of accumulated wealth, and many cite robust retirement accounts and Covid-19 fatigue for their early exit, according to interviews with wealth managers and federal surveys.
Much like the US economy's so-called K-shaped recovery, the pandemic is treating the affluent differently, empowering them to leave corporate life early. Others who lost jobs had to delay retirement, or grew discouraged and retired before they were ready.
Early retirements, whether desired or forced, will deprive the labour market of some of its most productive workers and have an impact on the economic recovery that is still too early to evaluate. Federal Reserve chairman Jerome Powell this week cited a "significant number" of people saying they've retired as one reason companies are reporting labour shortages, although it's unclear if they'll eventually rejoin the job market.
In the Minneapolis area, Craig DiLorenzo, 58, is among those who chose to bow out, after a career at industrial more time pursuing his other passions, including volunteering with the Salvation Army. A scare with cancer five years ago made him reconsider his commitment to climbing the corporate ladder, and last year’s stuck at home only reinforced those feelings, he said.
"It makes you think, 'Does all this matter as much as you think it does?'" said DiLorenzo, who retired at the end of March.
Financial advisers say they're seeing a new "life-is-short" attitude among clients with enough money socked away to carry them through retirement.
The prospect of going back to the daily grind is going to be "a really tough pill for a lot of people to swallow," said Kenneth Van Leeuwen, founder of financial services firm Van Leeuwen & Co. in Princeton, New Jersey.
One client, an executive whose stock portfolio has performed well, is retiring at 48 as the prospect of having to go back to travelling 10 to 12 nights a month isn't appealing anymore, Van Leeuwen said.
A November study from Pew Research Center found a surge in the number of baby boomers, those born between 1946 and
1964, who reported being retired compared to previous
years-1.2 million more than the historical annual average.
Other datapoints back up the findings. The number of people expecting to work beyond age 67 fell to a record low of 32.9 per cent last month, according to a New York Federal Reserve survey. And about 2.7 million workers aged 55 and older plan to apply early for Social Security benefits.