A new phenomenon has come to America and that is the occurrence of numerous Americans leaving their jobs for better opportunities, some are leaving for extended periods of time, and the rest, especially older Americans, are retiring. The biggest question being asked is why so many are leaving their work; however, we are asking if these retiring Americans have spoken with a professional retirement planner and if they have a retirement plan.
Sage Investment Advisers, LLC in Poughkeepsie, NY has been working with a number of older Americans to ensure their retirement plans are set so if they choose to retire, they can. So why are so many retiring? The simple answer to this is the COVID-19 pandemic, where many are deciding it is not worth risking their health to go into the office, though, the actual answer is a lot more complex.
The Baby Boom Meets the Retirement Boom
These last few years have been a bit different than they were in the past. Reaching retirement age now doesn’t mean exiting the workforce completely. Many retirees start businesses, shift to part-time work, or change their focus from their jobs to working for charities or nonprofit organizations. In 2008, the oldest baby boomers reached age 62. This coincided with the so-called “Great Recession,” when the economy declined and perhaps represented a less-than-advantageous time to start retirement. Many people decided to hold off on retiring and wait a few years. In 2021, the economy had distanced itself from those events and faced new developments. Just over half of adults aged 55 or older had exited the workforce and retired. For adult Americans aged 65 to 74, the percentage who had left the workforce was 66.9%, just over two-thirds of this population.1
So, rather than seeing everyone head to the door simultaneously, what we’re seeing is a bit of a “catch-up” period. We are looking at a picture of what might have been if the Great Recession had gone a bit differently. The pandemic created a transition period in which people decided that it was a natural time to work less, transition to new things, or retire completely. The pandemic has gone on way longer than any of us could have imagined, with the more potent Delta variant making way for the more contagious Omicron variant. Examining this context makes it easier to see why someone reaching the end of a long and rewarding career might choose to exit the pattern of working during COVID-19 and parachute into a less stressful, more enjoyable paradigm.
Is It Your Time, Too?
You might be thinking that this period of mass retirement presents you with an opportunity to cast off the yoke and ease into retirement. Despite the large numbers of people making this big transition, it is important to remember that moving with the crowd isn’t always a justified action.
It is best to work with an experienced financial planner/advisor who will be able to guide you in creating a custom retirement plan that will work for your budget as well as your retirement expectations. The last thing you would want to do is to retire without having a solid retirement plan set in place to ensure you are able to support your lifestyle even after stepping away from work. Many are currently following the crowd, but not taking the consequences of leaving the workforce without your retirement plan safety net.
Retirement planning is more important than ever with this mass exodus of Americans from the workforce. With inflation hitting an all-time high, having a substantial cushion for your retirement will give you the peace of mind you need to leave your job if you are finally ready.
Published by Sage Investment Advisers, LLC in Poughkeepsie, NY
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.