Nineteen percent of those in the lowest earnings tercile were no longer working in 2020 compared to one year earlier, the data reveals. In comparison, in 2009 during the Great Recession, 17% of people in that category were no longer working.
Meanwhile, 9% of the highest earnings tercile were no longer working in 2020, compared to 11% in 2009. The big thing that stands out about any recession, including the Covid recession, is just the extent to which it hurts lower income people more, said Geoffrey Sanzenbacher, research fellow at the Center for Retirement Research at Boston College.
Despite the negative consequences for people in this age cohort, there was not a noticeable increase in how many consider themselves to be retired. Part of that may be due to the fact that they are not yet 62, and thus unable to claim Social Security retirement benefits.
Why Some Older Workers Fared Worse During Covid-19 Than the Great Recession
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Don t Give Up On Your 401(k)
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In an unforgiving market, many low-cost balanced mutual funds split 60/40 between stocks and bonds lost 22 percent or more of their value last year, shriveling the 401(k) account balances of even well-diversified workers.
Those heavily invested in stock funds - or the single, sinking stock of their employer - lost even more. Many near retirement age will have to keep working for years.
In response, calls have intensified for changes in these employer-sponsored retirement plans, including proposals for the government to guarantee minimum investment returns.
I don t take sides on matters of public policy. I do believe it s a copout to blame any 401(k) plan shortcomings for our mistakes (or inactions) in saving for retirement.
The Benefits of Working Longer
Delaying retirement for a couple of years or even a few months is the most effective way to improve your retirement security.
April 29, 2021
John Rouse, vice president of operations for the Aquarium of the Pacific, plans to keep working until he s at least 68.
Photograph by Jose Mandojana
Financial planners and analysts have long advised workers who haven’t saved enough for retirement to work longer. But even if you’ve done everything right saved the maximum in your retirement plans, lived within your means and stayed out of debt
working a few extra years, even at a reduced salary, could make an enormous difference in the quality of your life in your later years. And given the potential payoff, it’s worth starting to think about how long you plan to continue working and what you’d like to do even if you’re a decade or more away from traditional retirement age.
Having a ‘dress rehearsal’ before moving in retirement can be a real eye-opener MarketWatch 5/2/2021
OUTSIDE THE BOX
I love red Ferraris so much so I ask for one for my birthday every year. I even received one once (it was 3 inches long).
But as much as I love Ferraris, I would take the car out on the road before I ever bought one. I bet you test-drove the last car you bought, too. So why do so many people make a much bigger, life-changing decision without trying it on for size?
I’m talking about retirement and specifically about relocating after retirement. It’s a common occurrence: According to a study by AgeWave, 64% of retirees plan to move at least once during retirement. The Center for Retirement Research at Boston College says it’s not a bad idea: Moving after retirement can improve psychological well-being, especially for those who proactively plan to move.
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