Commentary December 30, 2021 at 07:44 AM Share & Print
While the COVID-19 pandemic saw many older American workers leave the labor force, not many more of these workers are retiring and claiming Social Security, researchers at the Center for Retirement Research at Boston College found.
Before the onset of the pandemic, many older workers had internalized the idea that working until Social Security’s full retirement age helps people secure a comfortable retirement. Both retirement and Social Security claiming ages were trending steadily upward.
The researchers set out to learn if the pandemic disrupted this trend, and if so, to what extent. So they sought to provide a benchmark to answer the question.
Using data from the Current Population Survey, they compared patterns of leaving work and of retiring before and after the pandemic’s onset for those 55 and older. This comparison enabled them to identify factors that made older workers susceptible to job separations during the pandemic, determine whether leavers also identified themselves as retired and reconcile these patterns with recent trends in Social Security claiming.
The research showed that the rate at which older workers left employment increased dramatically during the pandemic.
This was especially the case with women — an 8-percentage-point increase vs. 7 points for men; Asian Americans — a 13-point increase; those with less than a college degree — a 10-point increase; and workers with occupations that did not lend themselves to remote work.
Retirement and Social Security Claiming
According to the study, workers 55 and older who leave their jobs usually also retire, whether voluntarily or involuntarily. But for the most part, this did not happen during the pandemic.
There was one exception: Workers 70 and older were 5.9 percentage points more likely to leave the workforce and retire. The study noted that these workers were likely already receiving Social Security benefits, so claiming did not markedly increase.
Among all workers 55 and older, the monthly claiming rate for Social Security benefits remained constant between April 2019 and June 2021, the researchers found.
The study offered two interpretations for the discrepancy among older workers between exiting the workforce and retiring.
It said some older workers may intend to return to their jobs as the pandemic recedes and vaccination and other medical advances make doing so safer.
Other workers may not intend to rejoin the labor force but are using other sources of income — federal stimulus payments or extended unemployment insurance, for instance — to postpone claiming Social Security.
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