After a year of early-morning Zoom calls, the specter of a deadly virus and soaring stock and real estate values, working American baby boomers who can afford it plan to get out while the getting’s good.
About 2.7 million Americans age 55 or older are contemplating retirement years earlier than they’d imagined because of the pandemic, government data show. They’re more likely to be White, a group that typically has a larger amount of accumulated wealth, and many cite robust retirement accounts and Covid-19 fatigue for their early exit, according to interviews with wealth managers and federal surveys.
Much like the U.S. economy’s so-called K-shaped recovery, the pandemic is treating the affluent differently, empowering them to leave corporate life early. Others who lost jobs had to delay retirement, or grew discouraged and retired before they were ready.
Early retirements, whether desired or forced, will deprive the labor market of some of its most productive workers and have an impact on the economic recovery that is still too early to evaluate. Federal Reserve Chairman Jerome Powell this week cited a “significant number" of people saying they've retired as one reason companies are reporting labor shortages, although it's unclear if they'll eventually rejoin the job market.
In the Minneapolis area, Craig DiLorenzo, 58, is among those who chose to bow out, after a career at industrial giant 3M Co. Frustrated over 6 a.m. teleconferences, his thoughts turned to spending more time pursuing his outside passions, including volunteering with the Salvation Army. A scare with cancer five years ago made him reconsider his commitment to climbing the corporate ladder, and the last year stuck at home only reinforced those feelings, he said.
“It makes you think, ‘Does all this matter as much as you think it does?’” said DiLorenzo, who retired at the end of March.
DiLorenzo’s cohort is one better known for hanging onto their jobs as long as possible, usually retiring later than their European counterparts. Their potential exodus from the corporate world, combined with a sharp increase in the number of business owners seeking to retire sooner than they anticipated, is a worrying phenomenon for companies that rely on their accumulated expertise. In addition, burnout among older physicians and teachers is pushing some to an early exit, threatening shortages in health care and education.
Financial advisers say they’re seeing a new “life-is-short” attitude among clients with enough money socked away to carry them through retirement.
The prospect of going back to the daily grind is going to be “a really tough pill for a lot of people to swallow,” said Kenneth Van Leeuwen, founder of financial services firm Van Leeuwen & Co. in Princeton, New Jersey.
One client, an executive whose stock portfolio has performed well, is retiring at 48 as the prospect of having to go back to traveling 10 to 12 nights a month isn’t appealing anymore, Van Leeuwen said.
Forty miles west of Boston, Melissa Marteney got tired of working more with less as the pandemic dragged on. She helped oversee state parks for the Massachusetts Department of Conservation and Recreation and was tasked with hiring hundreds of lifeguards and other seasonal workers each spring. But even as people flocked to parks to escape Covid-19 lockdowns, the state cut the seasonal administrative staff that helped her screen candidates.
She retired this year at 58, about five years earlier than expected. Her husband also retired from his job at a financial services firm, and now the couple plan to sail to the Caribbean over winters in their 42-foot (12.8-meter) sailboat. By exiting early, she’ll collect a smaller payout from her pension, but the couple’s other retirement accounts have ballooned so much lately that “we’re going to be in the green until I’m 92.”