Millions of workers retired during the pandemic. The economy needs them to “unretire,” experts say.

Link:https://www.cbsnews.com/news/retirement-covid-pandemic-unretire-labor-shortage/

Excerpt:

An economist will tell you it’s a hot labor market: A record number of people quit their jobs in September, and the U.S. is seeing record job openings as the economy chugs back to life from the coronavirus pandemic. The pandemic drove millions of workers into early retirement — and experts say they could be key to reviving the economy.

The number of people who retired rose much faster than the typical pace during the pandemic. More than 3 million additional people retired compared with normal, a Federal Reserve Bank of Saint Louis analysis found. Meanwhile, the economy is still down nearly 4 million jobs from before COVID-19.

“40% of the older workers that were pushed out of the labor market because they were unemployed, they were laid off, they were fired during the pandemic, 40% of them were permanent job losers and most of them said OK, I’m not just a discouraged worker, I’m not a long-term unemployed, I’m going to tell the [Labor Department] survey I’m retired,'” said Teresa Ghilarducci, labor economist and professor at The New School.

….

But even if retirees return to work at the average pre-pandemic pace, it will take more than two years to bounce back from the recent surge in retirements, the Federal Reserve Bank of Kansas found.

Last month, employment among workers 55 and older increased while unemployment dropped slightly. Older workers are typically more likely to face long-term unemployment than younger workers. While long-term unemployment among older workers changed little last month, it has declined in recent months. Older Americans coming out of retirement might not be returning to the same landscape.

Author(s): Sarah Ewall-Wice

Publication Date: 8 Dec 2021

Publication Site: CBS News

What Raising Retirement Age Does to Retirement Rates

Excerpt:

The most popular age at which to start claiming Social Security benefits is the minimum of 62, according to the Bipartisan Policy Center, even though most financial professionals will encourage their clients to hold off on claiming as long as they can, barring any exigent circumstances. A paper from the Center for Retirement Research at Boston College quantifies the impact that raising the age has on retirement behaviors.

Increasing the full retirement age for Social Security decreased the early retirement rate by about 30% for men and 20% for women, according to the paper published in January. The paper, “The Effect of Early Claiming Benefit Reduction on Retirement Rates,” was written by Damir Cosic, senior research associate, and C. Eugene Steuerle, fellow and the Richard B. Fisher chair, at the Urban Institute. They used data from the Current Population Survey to compare the effect of FRA reforms on early retirement rates.

Author: Danielle Andrus

Publication Date: 3 February 2021

Publication Site: 401k Specialist