The pandemic seems to be driving a surge of early retirements as businesses close or downsize and older people weigh the health risks of continuing to work.
The share of unemployed people not looking for work who called themselves “retired” increased to 60% in April from 53% in January, according to a study by three economists. The study was done in the early days of the pandemic, well before tens of thousands of businesses nationwide closed permanently and others began offering early retirement packages to trim their workforces.
“It seems to be a persistent and quite widespread phenomenon,” says study co-author Michael Weber, an economics professor at the University of Chicago.
Unfortunately, many people haven’t saved nearly enough to avoid a steep drop in their standard of living when they retire early, financial planners say. Even those with substantial retirement accounts could make hasty decisions that cause them to run short of money.
CREATE YOUR RETIREMENT BUDGET
Tally your expenses and identify any you can trim. Include irregular expenses, such as home repairs or a car replacement, that you’re likely to face in coming years.