En español | 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."
The average monthly Social Security benefit for retired workers is $1,503. But 67 percent of retirees on Social Security get less than that because they claimed their benefits before they reached full retirement age — 67 for people born in 1960 or later — the Social Security Administration says.
"Even in good times, most retirements are involuntary,” Ghilarducci says, because of issues including layoffs, business closures and health problems. “When you ask people if they retired at the age they thought they would, most people say they retired earlier."
Tough financial decisions in a difficult year
Before she retired last year from her job as a dental hygienist, Katy Pompe and her husband consulted a financial adviser and decided to delay putting in for Social Security until their monthly benefits have time to increase.
"My husband is a great saver, and he's converted me into being a great saver,” Pompe says as she walks her border collie, Lotus, in her neighborhood near Phoenix.
Now 62, she moved up her timetable for retiring from her job of 17 years soon after the start of the pandemic, in part because of worries about the health risks.
"The straw that really broke the camel's back was the PPE we had to wear,” she says of the heavy personal protection equipment required in the dentist's office where she worked, which made it hard to communicate with patients.
Still, she says, early retirement was a big step. “I was really concerned about not working, because I've done it for so many years, and I loved it."
Other Americans are already burning through their financial resources or reducing the amount they're saving for retirement. Twenty-two percent say the pandemic has forced them to spend their emergency savings, 10 percent have reduced their retirement plan contributions, and 12 percent have withdrawn money from their retirement accounts, according to a survey by the National Institute for Retirement Security.
The CARES Act temporarily allowed people with pandemic-related hardships to withdraw up to $100,000 from tax-deferred retirement accounts without penalty.
A quarter of workers say their employers have also cut their retirement matches. Among the companies that suspended their 401(k) matches are Amtrak, BestBuy, Choice Hotels, Dell Technologies, Expedia, Knoll, Norwegian Cruise Line, Quest Diagnostics, RE/MAX, Stein Mart and VMWare.
More and more older workers are carrying mortgage debt into their retirement, thanks in part to the last recession. Forty-six percent of older Americans have mortgage debt, nearly twice the proportion of three decades ago.
Skip Kelley wanted to pay off some debt before he retired, which he intended to do in another year or two. “I wasn't quite there yet,” says Kelley, who is 61.
Then the local television station he managed, in hard-hit Las Vegas, offered early retirement buyouts.
"I had a three-week period to make a decision about whether I was going to end my career or not,” says Kelley.
In the end, he took the buyout, which was enough to pay off those remaining debts. As for the lower monthly amount he would get for claiming Social Security early, “It actually was a big concern. Yes, my benefit is less than it would have been. But in the long run, it's the right decision, and I've adjusted already to what's coming in."
Unlike younger people living in poverty, most retirees have little or no prospect of upward mobility. Social Security and pensions are adjusted only to keep up with the rate of inflation. “That means you are locked in for the rest of your life” to the same basic income, Radpour says.
Concerns about caregiving also led to retirements
Anxieties about all these things have been heightened by the pandemic. More than half of Americans say their concerns about retirement have increased over the past year, that National Institute for Retirement Security survey found.
The trend is likely to create a downward spiral by putting more strain on younger relatives, who may have to retire earlier themselves to care for their parents.
Even before the pandemic, 40 million people, or 16 percent of the population, were caring for an older person without pay, according to the Bureau of Labor Statistics. Of those, nearly 60 percent are women, delaying or interrupting their own careers, and a quarter are over age 55.
"Younger generations are going to be impacted by their parents going into retirement if they don't have the resources. So are safety net programs,” says Doonan.
Pete Ramirez moved up his own retirement over concerns about being exposed to COVID-19 in his job as assistant director of a Tucson supermarket. He was especially worried he might pass it on to his parents, for whom he is a caregiver. Both are 90.
"At first you didn't see a lot of people getting sick” at work, Ramirez says. “But then they started getting sick, and I was thinking, ‘I'm taking this home.’ “
Ramirez retired on Jan. 1, just before turning 62, instead of at 65, as he had planned.
"My parents are more important than my job,” he says. And when an employee in her 20s died of COVID-19 the day after he left, “I thought to myself, ‘Now I know I made the right decision.’ “
Still, it was a decision that cost Ramirez $500 a month, which is how much less he says he'll get from Social Security than if he'd waited. But his house and cars are paid off and he has two IRAs, one from his 19 years at the supermarket and another from an earlier job.
The situation for many older workers isn't anywhere near that good.
Only about half of American households have 401(k) or retirement accounts, according to the Center for Retirement Research; the rest have to rely entirely on Social Security.
Half of Americans ages 56 to 61 had less than $21,000 in retirement savings in 2016, the most recent year for which the figure is available, the Economic Policy Institute reports.
"All these trends are very troubling for the near retirees,” says Doonan. “It's a bit late to start saving."
Desmond, Pompe, Kelley and Ramirez say they have few regrets about their new lives.
"At first, I was really concerned about not working, because I've done it for so many years, and I loved it. But I've actually embraced retirement. I really like it,” says Pompe, who bought an e-bike that she tries to ride every day.
Desmond has become active in pickleball, a paddleball sport with elements of tennis, badminton and table tennis. Kelley has a pile of stones in his driveway he plans to use to build a new retaining wall, and a shop behind the house where he restores classic cars.
Ramirez, whose hobby is woodworking, is building a porch and shelves, and planning with his wife for future travel. “My wife keeps saying I'll get bored. I don't foresee it,” he says.
Even for those who have managed to save enough money for retirement, the huge exodus of people who haven't risks slowing broader economic growth.
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"A well-pensioned elderly person in your neighborhood is a good thing. Just ask Arizona and Florida,” says Ghilarducci. “But we won't have that source of aggregate demand because elders will have a lot less income."
Social Security was an economic lifeline
Not everyone is convinced that the pandemic recession has significantly increased retirement insecurity.
"Pandemics are bad. Recessions are bad. Everyone has suffered during this in one way or the other,” says Alicia Munnel, director of the Center for Retirement Research and a former assistant secretary of the treasury for economic policy. But the crisis also proves that the Social Security retirement safety net “basically works,” she says.
"It's well designed. The checks went out every month as the world was falling apart. The program stood up for older people who couldn't find jobs,” she says. “The protections we would want are there. I'm not meaning to minimize the fact that there's a group of older people whose plans have been disrupted and who are more vulnerable."
More important to the long-term well-being of retirees, Munnel says, is to ensure that Social Security remains viable past 2035, when it is projected to fall short of being able to pay the full amount of benefits.
For some people, money played only a minor role in their decisions to retire during the pandemic.
Derek Manes, 57, director of graduate outreach and recruitment at the University of Minnesota, took an early retirement buyout to travel the world.
His parents “always said, ‘When we retire we're going to go to Europe, and we're going to do this or going to do that,’ “ Manes says. “And both of my parents died early, and I didn't want to make that mistake."
He plans to live on his savings and not even touch the retirement fund he's been building for at least another five years. And he won't apply for Social Security until after that.
"I'm really unusual, I think,” says Manes. “I have friends who say, ‘I'm going to work until I die, because I have no savings.’ And they're older than me. They're expecting to live on Social Security, and that's just not going to work."
Jon Marcus is higher-education editor for The Hechinger Report, where he has written about higher education for The Washington Post, USA Today, Time and The Boston Globe. He is the former editor of Boston magazine and a journalism instructor at Boston College.