Why a Massive Retirement Rush Is Underway
Older workers in many fields are feeling the urge — or the push — to retire. The question is, are they ready?


COVID-19 has changed the complexity of work, and a massive retirement rush is underway. With companies starting to return to the office or deciding to close for good, many employees between the ages of 58 and 65 are finding themselves contemplating retirement earlier than expected.
If you were close to retirement anyway, you may be wondering if returning to work is really worth the hassle and the risk to your health. It's time to stop wondering and work with a financial planner to see whether you can retire comfortably with reliable income sources.
The reality for older workers
This pandemic-prodded surge in people contemplating early retirement may be partly attributable to their getting used to having no commute and living in “athleisure” attire. Now, they are dreading a return to work attire and rush-hour traffic. However, for many, this contemplation is driven far more by the daunting fact that their work environments and expectations will be drastically changed when they return.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Teachers, for example, have had to master new technology and revamp their techniques for engaging students and providing feedback without the structure of a classroom. Working in a home environment with many distractions creates a stressful environment for everyone. A National Education Association poll found 28% of teachers said the COVID-19 pandemic made them more likely to retire early or change professions. In school districts opting for in-person classes, the numbers are higher, particularly for more experienced (i.e., older) teachers.
Health care workers are facing two realities in the crisis: Those on the front line are dealing with the stress of risking their health while being surrounded by the virus all day. Others have been laid off as elective procedures and non-emergency doctor and dentist visits are postponed indefinitely.
These examples illustrate some reasons early exits from the labor force are growing. Experts predict an estimated 4 million older workers will have left the labor force by October. This does hurt retirement savings in what would have been the crucial final years in the workforce, but many are finding their options are limited.
There is also a continued erosion of seniority-based advantages in the workplace and, while illegal, discrimination in hiring someone close to retirement age given the health risks and other concerns. As a result, since the pandemic began, 42% of older workers who lost their jobs say they've retired. Conversely, only 28% of older workers who became unemployed during the 2007-2008 recession said they had retired.
Best-laid plans
So, what is the main hesitation people have when deciding whether to leave the workplace early? A misconception that they can't afford to retire. That may be true for some. However, many are pleasantly surprised to find that, after reviewing their accounts and options with a financial planner, they are financially able to retire. This helps alleviate the stress caused by uncertainty, and provides people with reassurance and options.
Even when many older workers realize they have the financial stability to retire, they find that pulling the ripcord on a career requires a mindset shift. Besides adjusting to a new schedule, the transition involves reshaping your lifestyle and goals. Many focus initially on travel, hobbies or volunteering to derive a new self-identity, particularly if they found great satisfaction in their careers. However, mentally shifting the work-life balance also includes shifting from being a saver to a spender — within new financial realities.
Accordingly, meeting with a financial planner should be a critical first step in the planning process. It will help you identify your future sources of income, ways to continue growing your money, expenses to address and other factors. As financial planners, we note the sigh of relief from clients who realize they have what they need to retire comfortably.
Financial planning process
The financial planning process often starts with identifying assets that can be used for income. A retirement income model can help identify income sources to ensure a steady flow of income throughout retirement, such as real estate, pensions, retirement funds (potential IRA, 401(k) rollover balances), investments and other potential income streams. The next step is helping you analyze your possible Social Security benefits and when to claim them. Then, you factor in realistic expenses, such as health care, that are likely to increase considerably over your remaining lifetime. Finally, the process ends with helping you develop an investment strategy, including what assets, if any, to put in an annuity as a steady income source.
A mere generation ago, retirement was more predictable. People reached 65, signed up for Social Security and Medicare, and started receiving pension payments.
Now, with only 13% of Americans having pensions and the coronavirus forcing more workers to consider retirement, the picture has changed dramatically. Retirement comfort is based on assets rather than a pension, and financial planners are here to assist you with turning your assets into income. Amid the uncertainty created by COVID-19, advisers aim to structure retirement plans with as much certainty and as little risk as possible to ensure a steady income if you are contemplating or forced into early retirement.
The pandemic has spurred many older workers in fields such as education, health care and hospitality into unplanned early retirement, or the possibility of it. But many are finding that with the help of a financial planner, they can weigh the risks and benefits of returning to work and decide whether retiring sooner than expected is possible. Meeting with a financial planner can give workers approaching retirement the tools and peace of mind they need to be prepared.
Disclaimer
Jeffrey E. Bush is an investment adviser representatives of, and securities and advisory services are offered through, USA Financial Securities Corp., Member FINRA/SIPC. www.finra.org A Registered Investment Adviser located at 6020 E. Fulton St., Ada, MI 49301. Informed Family Financial Services, Inc. is not affiliated with USA Financial Securities.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Jeffrey E. Bush is the Managing Partner and Chief Operating Officer of Informed Family Financial Services and has been dedicated to providing high-quality service to his clients since 1994. Jeff received his MBA in Finance from St. Joseph's University and graduated magna cum laude from Alvernia University majoring in Business Management. He holds professional licenses, which include Series 6, 7, 63, and 65.
-
Congressional Republicans Tackle Trump's Agenda
The Kiplinger Letter Despite slim majorities in both chambers, the GOP is gearing up to overhaul taxes, border security and more.
By Sean Lengell Published
-
The True Costs of Owning a Second Home
What to consider before buying a vacation home, including mortgages, insurance, taxes, and upkeep.
By Dori Zinn Published
-
Three Essential Estate Planning Steps to Protect Your Nest Egg
After dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
By Nicole Farbo, CFP® Published
-
Is Chasing the American Dream Ruining Your Financial Life?
Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
By Anthony Martin Published
-
Retiring With a Pension? Four Things to Know
The road to a secure retirement is slightly more intricate for people with pensions. Here are four key issues to consider to make the most out of yours.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
How to Teach Your Kids About the Tax Facts of Life
Taxes are unavoidable, so it's important to teach children what to expect. Also, does your child need to file a tax return for 2024? Find out here.
By Neale Godfrey, Financial Literacy Expert Published
-
Revocable Living Trusts: The Good, the Bad and the Ugly
People are conditioned to believe they should avoid probate at all costs, but when compared with living trusts, probate could be a smart choice for some folks.
By Charles A. Borek, JD, MBA, CPA Published
-
How to Plan for Retirement When Your Child Has Special Needs
When your child has special needs, your retirement plan should include a plan for when you'll no longer be able to care for them yourself. A five-step guide.
By Christopher M. Butterworth, ChSNC®, CRPS, CLU® Published
-
Tax Advantages of Oil and Gas Investments: What You Need to Know
Tax incentives allow for deductions and potential tax-free earnings — benefits accessible only to accredited investors in small producer projects.
By Daniel Goodwin Published
-
Charitable Contributions: Five Frequently Asked Questions
Make the most of your good intentions by understanding the ins and outs of charitable giving. A good starting point is knowing what's deductible and what isn't.
By Stephen B. Dunbar III, JD, CLU Published