Impel Wealth Management
Did COVID-19 Move People to Retire?
July 26, 2021

This Week from Jesse W. Hurst, II
As we have seen with past periods of financial disruption and dislocation, the COVID-19 coronavirus outbreak has changed the retirement plans of more than 3.1 million Americans, age 55 and older. According to the Census Bureau, more than 3 million people plan to apply for Social Security benefits earlier than they had originally planned because of job loss or health issues related to the pandemic.

This is being partially offset by the 1.4 million people in the same age cohort who anticipate having to work longer because of the negative financial impact of the viral outbreak. The net result is that approximately 1.7 million Americans will retire sooner than expected, thus opening jobs for younger workers.

This will likely have long term impacts on those who are leaving the workforce sooner than expected. They will take their Social Security benefits sooner than planned. This will leave them with benefits that are locked in at a lower income level. By claiming their Social Security benefits at an earlier age, they create a permanent reduction in monthly benefits for themselves, their spouse, and their survivors.

However, we have seen a significant uptick in asset values since the March 2020 lows, in both the financial markets and in real estate. Some of the additional wealth that has been created or built over the last 16 months could be used to offset the loss in Social Security income.

A chart below from Bloomberg, sourced by the Bureau of Labor Statistics, shows the number of workers age 55+. It was relatively steady until calendar year 2000. Then, when the oldest baby boomers turned age 55, it turned upwards and continued to rise steadily until 2020’s viral outbreak.
Some older Americans are having a hard time finding new employment. Turning to Social Security, even on a reduced basis, and early retirement seems like the least bad option to them. Unfortunately, some of them may have to return to the workforce down the road if their cash flow and assets are insufficient to provide for their standard of living.

We will have to watch closely to see the long-term impact on those transitioning to retirement today. If you have friends or loved ones who are trying to make these important, often irrevocable decisions, and are looking for guidance, please let us know. We would love to be a resource to help people make smart decisions in times of volatility and distress. It is part of our mission as we continue “Moving Life Forward” together.

Jesse W. Hurst, CFP®, AIF®
Certified Financial PlannerTM
*Award Recipient Jesse Hurst
*The 2021 ranking of the Forbes’ Best–in–State Wealth Advisors1 list was developed by SHOOK Research and is based on in–person and telephone due–diligence meetings to evaluate each advisor qualitatively and on a ranking algorithm that includes client retention, industry experience, review of compliance records, firm nominations, and quantitative criteria (including assets under management and revenue generated for their firms). Overall, approximately 32,725 advisors were considered, and 5,000 (approximately 15.3 percent of candidates) were recognized. The full methodology2 that Forbes developed in partnership with SHOOK Research is available at 

1 This recognition and the due–diligence process conducted are not indicative of the advisor's future performance. Your experience may vary. Winners are organized and ranked by state. Some states may have more advisors than others. You are encouraged to conduct your own research to determine if the advisor is right for you. 

2 Portfolio performance is not a criterion due to varying client objectives and lack of audited data. SHOOK does not receive a fee in exchange for rankings. 
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