But savings behavior for lots of Americans has improved dramatically since Covid-19 struck in March 2020. It’s doubtful, however, that Americans will continue to save like the Japanese. Many favorite spending outlets either were locked down or compromised, and eventually they’ll reopen. Early indicators are that booming retail sales this past Christmas could be a harbinger of things to come in 2022.
How this all plays out remains to be seen. Most financially literate, longtime clients of financial advisors shouldn’t see their retirements in jeopardy if they decide to exit the workforce a year or two earlier than planned. After all, any sound financial plan has built-in guardrails for the unexpected.
But conversations with financial advisors reveals that their clients aren’t the ones deciding in the last year to leave their employer—unless it was in the plan.
For the current cohort of retirees, there may be one saving grace. The labor market is running out of workers and employers are the ones pounding the pavement struggling to fill jobs. If participants in the Great Resignation conclude they have opted to retire too soon, it may be a lot easier to re-enter the labor force in 2022 or 2023 than it was 12 years ago.