COVID-19 gave people a ‘revelation’ about retirement

By Jessica Hall

Pandemic changes views on retirement: how to save, when to retire and what to do.

The pandemic upended how people feel about retirement, with roughly a third saying it changed everything from how they save to when they want to retire and what they want to do.

A new poll of 2,002 US adults ages 35 to 70 found the pandemic had far-reaching effects on how employees are planning both their retirement and “pretirement”–the life stage serving as a transition period between full-time work and retirement.

Roughly one in three said the pandemic had changed how they save (31%), what they want to do (31%) and when they want to retire (29%). An even greater number said it had changed how they make health decisions (40%) and how they save for emergencies (42%), the poll found.

“With the pandemic’s aftereffects and ongoing inflation, people have had a revelation about retirement,” said Eric Phillips, senior director, partnerships and strategic insights at Human Interest. “The pandemic changed so much about retirement. It forced us to re-evaluate our lives and futures.”

Even the idea that work stops in retirement seems to be in question. The survey found that the average person believes you can work up to 11 hours a week and still be considered retired. A total of 69% said they believe retirement is a gradual change away from full-time paid work, rather than a complete stop or a full transition to leisure.

The survey split respondents by how they would describe their pandemic experience on a five-point scale, from “very easy” to “very difficult.” It found that 71% of those who had a “very difficult” time (659 respondents) now plan to retire later in life. A specific age was not stated.

People who rated their pandemic experience as “very difficult” were also more likely to aim to volunteer for a group, nonprofit, or other organization leading up to full retirement (49%). Two-thirds of all respondents said they had a somewhat or very difficult time during the pandemic.

This time before full retirement, or preretirement, is more of a gradual transition than a defined period of life, Phillips said.

“People are starting to shift to something that might have more value for them. Pretirement is a gradual shift from full-time, paid work to something else that gives you more joy or value or balance,” Phillips said.

Two-thirds (66%) of those who had a very difficult pandemic experience said the ideal retirement age is below 50, while less than a quarter (24%) of those who had a neutral pandemic experience said the same.

The survey was conducted by OnePoll, the market research division of SWNS, and was commissioned by Human Interest, a provider of 401(k) and 403(b) plans.

Among other findings, the poll found that more than nine out of 10 workers were open to switching fields or jobs during pretirement.

Small and medium-size business employees were more affected by the pandemic than those working for large companies–72% of those working at organizations with 250 to 499 employees said they would retire later than planned, 35 points higher than those working at large companies or 1,000 employees or more.

Workers have a diverse set of reasons for transitioning into a new job or industry before retirement. Looking to earn money and make their savings last longer (40%) and wanting to do something to impact their community (39%) are at the top of the list.

The coming election may be top of mind for nearly a quarter (24%) of the respondents who said they want to run for office when they retire. Those who had a very difficult pandemic experience are even more politically engaged–34% said they would want to run for office.

“People are more motivated to try to make a difference. The pandemic gave people time to reflect and they emerged thinking they wanted to help out,” Phillips said. Mobility is a key desire for those planning retirement. Only 21% said they would stay where they are currently living–the rest are split between moving to another city in the same state (31%), moving to a different state (25%), becoming nomadic (10%), and moving to another country (11%).

The top states people want to retire to are California, Florida, New York and Georgia, the poll found.

Some respondents said they wanted to move away from family. One in five people want to move further away from their children when they retire and 17% say they will be splitting from their spouse or partner in retirement.

Goals in retirement ranged from the creative to curious: 38% said they wanted to write a book, start a podcast, or achieve another creative accomplishment, 36% said they were curious to explore their city or state, and 34% said they wanted to learn and start playing a new sport, run in a race, or take up yoga. Another 34% said they wanted to live in a vacation destination for a while.

-Jessica Hall

 

(END) Dow Jones Newswires

11-01-22 1203ET

Copyright (c) 2022 Dow Jones & Company, Inc.