In an economy shaken by the pandemic, more workers are retiring to the US

September 16, 2021 – 2:45 am

Prior to the coronavirus pandemic, Antonio Fernandez, 64, had imagined staying at his job at the Chevron Company in Houston for perhaps five years.

“I think he had at least five more years of work,” Fernandez said of his occupation with the oil giant. “I didn’t really want to retire.”

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But, as with so many other things, the pandemic is rethinking the rules about when to retire in the United States.

Retiring much older had been a clear trend in the prepandemic era of the world’s largest economy, sometimes out of preference but often out of necessity.

Some chose to remain employed until age 70 to maintain benefits in a country where health care costs are notoriously high. In other cases, older adults were forced to continue working after the 2008 financial crisis shattered their retirement savings.

But since the spring of 2020, millions of people over the age of 65 have left the workforce, often sooner than expected.

In June alone, 1.7 million more retired than expected, said Teresa Ghilarducci, a researcher on work and retirement at the New School For Social Research in New York.

After being fired last fall, Fernandez looked for other jobs but was unsuccessful. “I have conflicting feelings,” he told AFP. He added that the company mainly kept the staff earning the lowest salaries, which is a change of approach from other cuts in the past.

“In the end, even if it doesn’t feel fair, it’s not so bad for those who, like me, have enough years of work and are relatively close to retirement and can receive a one-time pension driven by low rates. of interest “.

Not this list to go

Stopping working prematurely was also difficult for Brenda Bats, 62.

After a 43-year career in a nursing home in Florida, her job became much more exhausting during the pandemic when she was asked to wear a mask and goggles.

Bates suffered a transient ischemic attack, a kind of stroke with long-term effects. After having difficulty breathing while swimming, Bates discussed options with her husband. “We made the decision to do it for my health,” he said.

“Before the pandemic, I thought I would work at least until I was 65 to get Medicare,” the public health program for seniors told AFP. “I love my job, so I was hoping to stay as long as I wanted.”

But Bates is far from the only one who left the job earlier than expected.

Whether out of fear of an insecure job or the loss of jobs amid economic turmoil, “millions of older workers are simply retiring and often before they are ready,” Ghilarducci said.

“It’s scary,” said Bates, who now works as an independent contractor for a company tasked with hiring seniors.

“You’re giving up a really good salary and all your benefits. One day you have nothing left.”

While most retreats involve workers over the age of 65, more workers aged 55 or older with no college degree are also leaving their jobs, Ghilarducci said.

Retirements of black workers without a university diploma increased by 9.2%, while white workers with the same educational profile increased by 7.5%.

One of the risks of early retirement is that it increases poverty among the elderly population.

Also read: The pandemic swept away 20 years of efforts against poverty: UN

At the same time, some older workers are in a relatively good time to retire, at least compared to previous crises.

“During the global financial crisis, there were obviously a lot of people who had lost all their retirement savings, and 10 years later they still couldn’t retire,” warned Jacob Kirkegaard, a member of the Peterson Institute of International Economy.

“Right now the situation is exactly the opposite,” Kirkegaard said, noting that the stock market has risen during the pandemic along with housing prices, which collapsed after the 2008 market crash.

But the exodus of workers can be problematic for economic recovery in some cases because some of those who have left are “highly experienced and highly skilled people,” Kirkegaard said. “And they are no longer available.”