For those Americans who have the financial means (and desire) to delay receiving their Social Security benefits while also retiring early, the golden years are looking particularly golden. This is something that is happening more frequently these days as a result of the stimulus payments, rising home values, and stock-market gains that have occurred during the pandemic era.
As the Washington Post reports, the COVID-19 economy has generated “among of the biggest incentives to retire in recent history.” Many retirees are also delaying claiming their Social Security benefits in order to receive larger monthly payments.
After examining Labor Department figures through September, a WaPo investigation found a 5% decrease in the number of people filing for Social Security benefits over the same time last year. According to the Social Security Administration, that was the largest reduction in nearly two decades.
The number of retirees between the ages of 65 and 69 increased by 5 percent over the same time. About 3 million American pensioners benefited from the pandemic, which is about twice as many as would have been predicted prior to the outbreak.
This shift is being driven by three facts: generous federal stimulus and unemployment insurance payments; larger retirement funds thanks to stock market gains and soaring home values; as well as COVID-related restrictions that have forced seniors to apply for Social Security benefits online rather than in field offices.
A University of Colorado at Denver economist tells the Washington Post that “with economic downturns we find higher reliance on Social Security programmes, and felt that was what was going to be coming with the epidemic.” Claims data “doesn’t support that at all.”
The nature of the COVID-19 pandemic itself, which has led to both economic and health uncertainties, is another factor driving retirements higher, particularly among women.
According to an economist at Wellesley College, “health problems are unique to this recession and may be playing a role, especially because workers aged 65 and over are less likely to be able to telework than younger people,” Courtney Coile says.
Retiring early may be an option for those in the United States who have a comfortable financial situation, but it is more difficult for those who are still struggling to make ends meet. Only 36% of non-retired Americans believe their retirement savings are on track to meet their post-retirement financial needs, and almost a third of those who had intended to retire say it will now happen later due to the pandemic, as GOBankingRates previously reported.