Retirement is supposed to be a happy time, but Lucie Desmond expects there will be tears when her paperwork comes through.
Desmond, 62, has been a flight attendant for 36 years, most recently on the American Airlines route between Phoenix and London. But after repeated leaves forced by the COVID-19 pandemic, she has put in to retire much earlier than she had planned.
"I could have done that till I was 70,” Desmond says. “Then COVID hit."
Her friends who have already retired early from the airline went through the same anguish. “They cried. They literally cried,” says Desmond. “It hasn't honestly sunk in yet. It's very sad."
There are also financial considerations. Although she'll get a payout from the airline, “I won't be getting my salary, so I have to dip into my savings.” She hasn't yet decided when to claim Social Security, since monthly benefits are lower for people who claim them before they reach the program's full retirement age.
In the meantime, “I won't be getting a paycheck, which is scary for me."
A year after the COVID-19 pandemic was declared a national emergency, many of the disproportionate number of older Americans pushed out of the workforce by the combined health crisis and economic downturn are retiring earlier than planned, risking long-term financial insecurity because of lower-than-anticipated savings and payouts from pensions, Social Security and other sources.
"Older workers, millions of them, are going to be downwardly mobile from the comforts of middle-class life,” says Teresa Ghilarducci, a labor economist at The New School and director of its Schwartz Center for Economic Policy Analysis, who specializes in retirement security.
"People plan their retirement years and they look at their spreadsheets. They assume raises. They assume they will pay off their debts. Then this recession hits and they're forced out of the labor force, and all of those assumptions disappear at once."
Two million older adults have stopped looking for work
The number of people affected by this problem is beginning to come into focus.
In a reversal of previous recessions, when they were protected by their longevity, older Americans are more likely than mid-career workers to be out of work this time, according to the Center for Retirement Research at Boston College.
More than a quarter of all workers say COVID has prompted them to move up their retirement date, found a survey released in February by the National Institute for Retirement Security.
Nearly 2 million older workers have left the labor force for good since the start of the pandemic, the Schwartz Center says. That means the number of older workers still employed is down by about 5 percent, compared to less than 2 percent for workers ages 35 to 54.
The rate at which older workers continue to participate in the workforce, either by staying in their jobs or by seeking new ones, fell in January to its lowest point since the start of the pandemic, the Schwartz Center says. The Center estimates that 3 million more older workers would be working now if the pandemic did not happen.
The proportion of all Americans who will be financially insecure when they retire — meaning they will be unable to maintain their pre-retirement standard of living — has also increased, from 50 percent to 55 percent, according to the Center for Retirement Research.
"These workers were already at risk for downward mobility, but [the pandemic] accelerated this trend,” Ghilarducci says. And that will bring “a lot of silent and solitary misery as people cut down their spending.”
Job losses have hurt some groups more than others
Lower-income older workers are the most affected.
"People in higher-paid tracks have kept their jobs. At the same time, the folks at the bottom are involuntarily losing their jobs,” says Dan Doonan, executive director of the National Institute on Retirement Security.
Those older workers who have jobs that can be done from home are typically the ones with greater education and higher incomes, the Center for Retirement Research estimates.
Unemployment for people in lower-paying jobs and for Black, Hispanic and Asian older workers has been more than twice that of higher-income older workers during the pandemic.
"The other side of this is the inequality of it,” says Siavash Radpour, associate director of The New School's Retirement Equity Lab. “Many who have lost their jobs are in the bottom half of income. They didn't have much retirement savings anyway. If they had the prospect of wage growth, they have lost it by losing their jobs."
This leaves many people to depend exclusively on Social Security. Yet the earlier a recipient claims Social Security, the lower his or her lifetime benefits will be.
"If you go out early and take Social Security early, that reduction is for the rest of your life,” says Doonan. “You'll be living with low income for the rest of your life."