While a significant percentage (40%) of study respondents said their work was impacted by the COVID-19 pandemic, retirement expectations for the majority remain unchanged, according to a panel of industry experts during a webinar hosted by EBRI recently.
The panel explained how the COVID-19 pandemic impacted older Americans’ working and financial situations, and provided some critical insights on their expectations for retirement and for claiming Social Security benefits. The panel was moderated by Nevin Adams, chief content officer with the American Retirement Association.
One of the panelists, Zhikun Liu, told participants that based on data from a 2020 Health and Retirement Study (HRS), COVID-19 affected older Americans’ work and financial situations to a significant extent. The HRS is a survey of 37,000 Americans over the age of 50 and was conducted by the Institute for Social Research at the University of Michigan, added Liu, who is senior research associate with EBRI.
According to the survey, 40% of respondents said that their work was affected by the pandemic, compared to 60% who said that their work was not, Liu said. Fourteen percent lost their jobs, 50% stopped working, 47.8% were furloughed or laid off temporarily, and 6.5% said they quit their jobs.
Because of the pandemic, 21% of respondents said that they had to change their work days or hours, and 38% had to work remotely. Also, those participants whose work was impacted by the pandemic expected a slightly later Social Security Benefit claiming age.
The financial situation of 75.7% of respondents stayed the same, and surprisingly, the income of about 5% of respondents actually went up, while about 20% saw a decrease in income.
Also, almost 60% of respondents said their spending did not change because of the pandemic, and no particular wage group reported that their work was significantly more affected by the pandemic than other groups. Men were more likely to say that their jobs were impacted by the pandemic then women, especially those men who had lower levels of education.
Liu offered the following conclusions:
Based on the 2020 Health and Retirement Study, COVID-19 affected older (age 50+) American adults’ work and financial situations significantly.
Although there is generally a natural upward trend for older American adults to expect a later and later retirement age, this natural trend of delaying retirement has no statistically significant relationship with the COVID-19 pandemic.
The average percentages of participants who reported their work was affected by COVID-19 do not differ substantially by their demographic and economic status variations (such as age groups and wage cohorts). However, among those with relatively fewer years of education, male participants are more likely to report that their job was affected than female participants.
Older American adults’ retirement expectations (including planned retirement age and Social Security, benefit-claiming age) remain uninterrupted, despite enduring COVID-19’s impact on their work as well as their financial situation in 2020.
More to be considered
Another panelist, David Blanchett, managing director and head of retirement research at PGIM DC Solutions, shared the following insights about retirement-age expectations:
There are interesting demographic effects (e.g., age, income, gender) that need to be considered when analyzing retirement expectations that potentially vary across ages.
There was relatively little movement in retirement-age expectations during COVID, especially for older participants (who are actually near retirement).
The “great migration” that recently took place in the American population could result in lower retirement-age expectations, but that depends on how spending and expectations change.
Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].