Before the pandemic, no one would have guessed that Dean Hebert was heading into early retirement, let alone himself.
He enjoyed his work as an academic advisor at the University of Maryland Honors College. He imagined that he would work for at least another five years.
Then, during the pandemic, Hebert reconnected with a woman he had known years earlier who lived in North Carolina. Working remotely allowed the relationship to flourish. When the campus reopened, things got complicated.
Luckily, while working from home, he had developed a new obsession: watching retirement planners. He quickly realized that his frugal life and smart investments had paid off.
At the end of July, a few months before his 55th birthday, Hébert retired after 28 years of career at the university. He is now preparing to move to North Carolina.
“I had two really wonderful things to choose from and I went with the one that seemed like the best choice,” he says.
Financial security has pushed older workers into retirement
Even though many Americans have returned to work over the past year, making up for most of the pandemic’s workforce losses, a significant number of older workers are choosing to stay away.
In September, the share of people 55 and older who were working or looking for work was down 1.5 percentage points from February 2020, according to the Labor Department. (For comparison, prime-age workers, or those aged 25 to 54, were down just 0.3 percentage points from before the pandemic.)
Several complex demographic factors contribute to this decline.
There are also more easily explained reasons. During the pandemic, many older workers have had time to rethink their priorities. And until the last few months, the pandemic had done them good, financially.
“I realized at some point that there was enough money there. If I worked for another five years, the only result would be that I would die with more money in the bank,” Hebert says.
Lauren Bauer, an economics fellow at the Brookings Institution, found that college-educated older workers, in particular, now have choices.
“One of the reasons we’ve seen older workers feel empowered to leave the workforce during COVID is that their balance sheets were good,” she says.
Things were different for older workers after the Great Recession
The situation today is very different from what happened after the Great Recession, when the housing market crashed and many older workers couldn’t retire because they didn’t. couldn’t afford it. For years, older workers have stayed on the job, compensating for the decline of young people in the labor force.
Now things are reversed. Older people, especially those over 65 who choose not to work, are one of the main reasons the workforce has not fully recovered from the pandemic.
But Bauer says it’s not all bad news.
“I would rather people stay out of the labor market because they can retire with financial security than bring them back into the labor market because their situation has become more precarious,” she says.
Of course, these are uncertain economic times. Inflation is at 8%. The stock market crashed, sending Hébert’s investment accounts down about 20% this year.
Hébert is not too worried yet. He bought a repairman in North Carolina when interest rates were still 3% and recently put his house in Maryland on the market. Once that sells out, he thinks he’ll be able to ride out the downturn in the markets. And if not, he has a plan B.
“I could work. I could have a part-time job,” he says.
But not right now. He’s too busy planning his many retirement hobbies, including riding his motorcycle on the mountain roads of western North Carolina.