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Early or Late Retirement?

By Deborah Jeanne Sergeant

Pandemic has been a major factor in people retiring early, says expert

In 2020, a TIME magazine story related that “as of February 2019, more than 20% of Americans over 65 were working or looking for work, nearly twice the 1985 rate.”

But recent years have tweaked this trend for a variety of reasons.

“Five years ago, I could say, ‘People are retiring later and here’s why,’” said Cynthia Scott, president of OMC Financial Services in Dewitt. “Now you have to assess it. The pandemic has been a major factor in people retiring early.”

Some people used the quarantine time to reassess their lives and realized they wanted to start their own business or perform gig work whenever they want. Others left their corporate job early to earn further education and seek a completely different career. Still others dropped out of the workforce entirely to stay home with dependent family members.

“Those who have to retire later are doing it for financial stability,” Scott said. “Plus, there’s the elephant in the room: health insurance. The days are gone when people received health insurance from their companies the rest of their lives.

“Retiring later is also a generational effect,” Scott said. “People who are in their 60s are pushing it out because they like their job or they go back to a different position. We laugh about the greeter at Walmart but that’s typical for people who don’t want to retire. They get self-worth from work if they enjoy it. The trend is that people will retire later, but they may not retire later from their ‘career jobs.’”

The gig economy is one reason that people are retiring from their corporate jobs early but continuing to work, according to Bill Chamberlain, managing partner of The Finger Lakes Group in Binghamton, Elbridge and Auburn.

They work gigs because “Social Security is their main source of retirement income and they can’t live on Social Security. There’s a real fear of outliving your money. If you’re bringing in a little every month, that’s money you’re not taking out of your nest egg.”

A growing number of older adults are raising their grandchildren full time. The prospect has not become any cheaper than it was the first time around. Randy L. Zeigler, certified financial planner and private wealth adviser for Ameriprise Financial Services, LLC in Oswego, said that “it’s becoming a more common issue” and a reason for continuing to work, since they have not been able to add as much to their retirement fund while they pay for their grandchildren’s needs.

Boredom represents another reason for delaying retirement. Ziegler said that many clients tell him they want to keep working to stay out of their spouse’s way. Being together 24/7 can cause staleness or even friction in the relationship.

Many people keep working for the classic reason of accruing greater Social Security benefits, especially if the higher earning spouse is older.

“That survivor benefit could be really big for the spouse,” he said.