A Social Security Administration office in San Francisco.
One of the most immediate effects at the onset of the Covid-19 outbreak early last year was an upheaval in the workforce.
Now, almost two years later, data suggests only one cohort of older workers accelerated their retirement plans — those ages 70 and up.
Consequently, there has likely been “only a small increase” in the claiming of Social Security retirement benefits prompted by the pandemic, according to research from the Center for Retirement Research at Boston College that’s based on data from the U.S. Census Bureau’s Current Population Survey.
Undoubtedly, the pandemic prompted many workers ages 55 and over to leave the workforce. Data shows that the likelihood of that age cohort stepping out of the workforce increased by 50% over the pre-pandemic rate, or by 7.6 percentage points.
Those most vulnerable to a career disruption included women, Asian-Americans, people without a college degree and professionals who work in positions where they cannot work remotely.
But older workers’ exits did not necessarily point to retirement, the data shows.
The average retirement rate before the pandemic is 12.2%, compared to 13.3% post pandemic. “That 1-percentage-point difference is statistically significant, but qualitatively small,” according to the Center’s report.
However, one particular group — workers ages 70 and older — were 5.9 percentage points more likely to leave their positions and retire during the pandemic.
Social Security benefits are structured so that the longer beneficiaries wait to claim retirement benefits, the bigger their monthly retirement checks will be. But that stops at age 70.
Consequently, most of the older workers who decided to retire likely had already claimed their retirement benefits before the pandemic, the research concludes.
Just how those retirement trends continue to take shape will depend on how conditions play out over time, according to the research. Some older workers may be waiting for Covid-19 issues and restrictions to ease before getting back into the work force.
Others may not intend to return to work, but could still be putting off claiming Social Security due to other income from stimulus payments and unemployment insurance.