According to recent estimates, Covid forced up to 3 million Americans to retire earlier than planned. This development pushed the percentage of people aged 55 and over who are retired to 50%, which is 2% higher than it was before the pandemic.
All things being equal, this means we’d expect to see a spike in the number of people who moved for retirement, but that didn’t happen. Quite to the contrary, the number of retirees who moved in 2021 dropped to 226,000—roughly 43% fewer than in the year previous. It’s also the lowest number of American retirees in the last five years!
More Retired, But Fewer Moved: The Decline In Retirement Moves In 2021
The trend for retirees this year is clear. But what are the causes? There could be a few plausible reasons for this discrepancy.
Why Are Fewer Retirees Moving?
1. Covid: It may seem like the pandemic is coming to an end, but it’s worth remembering that older Americans were the cohort hardest hit by the virus, with rates of infection, hospitalization and death highest for folks over 65. It’s therefore conceivable that many would-be retirees had Covid, had to care for someone who had it or were otherwise affected by it. This may have undermined their willingness and ability to relocate.
2. Housing market: After a turbulent 2020, to say that the housing market rebounded this year would be a huge understatement. Prices continue to climb at a record pace, especially in the desirable quiet, quaint, low-on-crime, high-on-sunshine neighborhoods retirees tend to seek out. Meaning, despite the fact that most retirees downsize, they may be getting priced out of places where they’d like to retire.
3. Lack of retirement savings: Many Americans lacked retirement savings due to having to spend them to sustain themselves or support their families even before the pandemic. This situation has arguably gotten worse in recent years, with one recent study finding that 14 million Americans stopped contributing to their pension plans.
Most Stay Put, But Those That Go, Go Far: How American Retirees Moved In 2021
Despite dwindling numbers of retiring Americans deciding to relocate, those that do make that decision tend to travel a lot further than a typical person moving in 2021.
Americans moving for retirement were three times as likely to leave their state than of those moving for work, family or any other reason (47% vs. 16%).
