Many Pandemic Retirees Weren’t Ready. How to Cope if You’re One of Them.

Andrea Jones hadn’t yet set a date to retire from her customer service job at United Airlines when Newark Airport looked like a ghost town in March 2020. After 28 years with the airline, she still loved her job. But at the end of that month she had hung up her blue uniform for the last time. She’s still struggling with a sense of loss.

“I wasn’t ready to go at all,” she said. “It hit me right between the eyes.”

Ms. Jones, 68, of East Windsor, NJ, retired to protect the health of her husband George, who has multiple myeloma, a form of cancer. Fortunately, the Joneses had a nest egg, and United offered a retirement package that allowed her to keep her health insurance.

Patricia Scott wasn’t that lucky. Ms. Scott, a special education teacher in Stockton, California, retired in January to maintain her own health. As the grandmother of 10, she survived breast cancer in 2016; Her oncologist told her she couldn’t risk contracting Covid-19 by returning to the classroom. Now, at 66, she is on financial quicksand. “My income is only half that,” she said. She is single and in debt. “I’m stressed, depressed and afraid.”

For many of the nearly three million workers aged 55 to 70 who have left their jobs since March 2020, retirement during the pandemic has caused two trauma. Like Ms. Jones and Ms. Scott, most of them felt compelled to lose their jobs before leaving, said Teresa Ghilarducci, professor of economics and policy analysis at the New School for Social Research. Among this subgroup, the majority, like Ms. Scott, are financially unprepared, Ms. Ghilarducci said.

According to New School research, far more older workers retired during the pandemic than during other recessions. For example, after the 2008 financial crisis, 1.9 million older workers left the labor force in the first three months of the recession. That is 35 percent less than in the first three months of the pandemic. The latest data shows that 1.7 million of the newer wave of retirees have left despite financial uncertainty, Ms. Ghilarducci said.

Their departure was generally not an offer for a few extra years of bird watching. “A lot of people have been pushed out of their jobs,” said Ms. Ghilarducci; she attributed this surge in part to age discrimination. “It used to be that in a recession, employers let those they just hired go first, but this time the older people, who had been in their jobs the longest, were the hardest hit.”

The lack of enforcement of anti-discrimination laws is a factor, she said. For example, some employers saw the pandemic as a rare opportunity to get rid of older workers who are perceived to be less productive and more expensive.

Regardless of the reason, the new army of reluctant retirees, which, according to the New School’s June data, is disproportionately composed of black workers and those without college degrees, is in trouble. One main reason: The debt ratios of Americans over 65 are higher than ever, Ms. Ghilarducci said. And they are likely to rise as more people are forced to siphon off their fortunes to make ends meet. Receiving social security earlier than expected will increase your vulnerability, as applying earlier will permanently reduce your benefits.

Even for people with a financial safety net, the hurdles can be significant. “There’s a lot of stress about being forced into retirement,” said Malcolm Etheridge, a Washington financial advisor who has several older, newly unemployed clients. “It takes time to overcome the disorder.”

For some, Mr. Etheridge has found, a part-time job can restore a sense of balance. For others, the path is not as bleak as it seemed. “A lot of people have an ambition that they will retire with a certain amount of money at a certain age, but they have no idea that they can potentially adjust those goals.” One of his customers, pushed by a software engineering job at Verizon after 27 years, was surprised to learn that he could have easily retired two years ago.

Customers who suddenly have time to spare sometimes risk too much of their savings for Mr. Etheridge’s taste, especially as a start-up. He said he has seen more colored entrepreneurs starting businesses since the pandemic began. “It is important that they take steps to shape their own futures, but some are retiring to get started,” he said. “You have to make sure that the money is still going into retirement plans.”

For the nearly 20 percent of low-income workers over 50 who felt they had no choice but to retire, it will most likely not be possible to top up their retirement plans after losing their jobs, said Ms. Ghilarducci: “You will only social insurances are trustworthy and they will be poor. ”Ms. Scott, the teacher, was not in that category because she has a pension, but it is a long way to fill her retirement bucket as well.

Updated

Aug. 12, 2021, 9:00 a.m. ET

Although the early retirement incentive package she accepted from her school district in January kept her afloat, she will be soliciting a $ 426 monthly student loan payment that she deferred in January. “I think about that $ 426 number at least five times a day,” she said. If she resumes payments, she will no longer be able to afford her rent. “I don’t know what I’m going to do. I will have to move in with a relative and be a burden. “

Jovan Johnson, a certified financial planner based in Atlanta, said Ms. Scott and others in their situation should seek out a pro bono financial advisor who can help them understand their money. “There are many of us out there helping people in crisis for free,” he said. He recommends searching websites such as the XY Planning Network.

The main benefit of sitting down with a professional could be panic relief, he said. But the 15 new pensioners who have asked him for voluntary help since the beginning of the pandemic, including nurses and teachers, have also gained a better understanding of how to deal with limited funds. “Everyone deserves to have a plan,” he said.

Getting a grip on money is one way of taking control. Dealing with the emotional aftermath may not be that easy. Ms. Scott’s loss of identity as a teacher is just as much to blame for her depression as the financial pressure. “I could spend six hours a day, five days a week with kids who needed me badly, and to be honest, I was great at it,” she said. “Leaving her in the middle of the school year felt like losing my own children.”

For Janice Sands, 71, who retired in March after 23 years as managing director of the Manhattan art organization Pen and Brush, the stress began last year when she contracted Covid-19 and spent several weeks in an intensive care unit. She wasn’t psychologically ready to retire, but since she hasn’t fully recovered, she felt compelled. “I was one of those people who had to be driven out there, I loved it so much,” she said.

Now she’s getting used to a more restricted routine. They flummox the most on Sunday evenings and Mondays. “It’s like having a dream where you have a final exam and have never been to class, or you forget your locker combination. I always think I have to go to work. ”Instead, she walks with her husband Wallace Munro, a retired actor, and visits the grocery store more than she thought she’d ever want.

“There is something to be done,” she said. “You have to restructure your life if this happens to you. It’s so easy to get depressed. “

Mr. Johnson, the financial planner, gave tips on how to balance your income and expenses if you are being driven into unemployment without warning.

  • Make sure you don’t have an old pension or 401 (k) money from previous employers. People who have renewed retirement accounts from previous employers often forget about them.

  • Don’t feel guilty about using social security prematurely – especially when you have no other option. You can take advantage of your benefits from the age of 62. However, the downside to applying before your full retirement age (you can read about this on the Social Security website) is that it will permanently reduce your total monthly payments. If your income is below a certain threshold, all of your social security contributions can be tax-free.

  • Use social security payments for your non-discretionary, fixed expenses and retirement savings for discretionary expenses, such as: B. Travel and Hospitality.

  • Bridge the Medicare gap, as the eligible age is 65. Consider plans under the Affordable Care Act. Typically, if your income is low enough, you can get bonus tax credits and other benefits by opting for a plan on the marketplace.

  • When social security and retirement planning can’t sustain your lifestyle, it’s time to consider Medicaid, Supplemental Security Income, and similar programs.

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