The Retirement Newsletter: The Great Retirement

Issue Number: -123 — is there a boom in the number of people retiring?

Nick

Sep 12, 2021

Photo by Anukrati Omar on Unsplash.

Welcome

This week, I am going to look at something a bit different — The Great Retirement.

And, can I ask a favour?

Please, can you share this newsletter with any of your friends that may find it interesting or useful - thanks….

"The Great Retirement"

The other week I was at a big outdoor event in the UK where I met up with some friends, and we ended up chatting about — you guessed it — retirement. (I remember when I used to go to the same event and my friends talked about their great new jobs and their planned careers. How things have changed!)

Anyway, in our conversations, one thing struck me. I realised that my friends who are 5 to 10 years younger than me were talking about retiring. This struck me as odd. Friends in their early 50s were talking about retiring in the next couple of years. They were talking about retiring as soon as they could.

I pushed some of them on the question of early retirement and why they were considering it, and their answer surprised me — COVID-19.

They said that COVID-19, successive lock-downs in the UK, and working from home, had made them revaluate what was important in life. The typical comments I heard were:

I am done with commuting — life is too short to spend it on trains or in cars going to work.
If they make me go back to the office five days a week, I will retire.
I get more done at home.
I have a better office set-up at home.
Why do I need to be in an office? COVID-19 has shown that I can do my job from home.

There was no consensus on the maximum number of days in the office; some thought two, others three but all agreed that they felt their job could be done from home with limited visits to the office.

I thought what I heard may be unique to my friends, but then I did some digging and came across:

'The Great Resignation': June's US jobs report hides unusual trend - Guardian, UK

The article gave an interesting insight into 'pent-up resignation demand'. That is, people didn't resign last year as they wanted and needed to hold on to their jobs. And now the economy is beginning to recover; people are starting to resign and move to new positions. But was that what I was seeing? I don’t think so…

The article also pointed to:

The Next Great Disruption Is Hybrid Work—Are We Ready?

The piece stated that 46% of the workforce planning to move because they can now do remote working.

Now, both articles are talking about resignations and not retiring, but in:

3 things you should know about the millions of people quitting their jobs

The Howard University Economics Professor William Spriggs was quoted as saying that the "number of people retiring is a "huge factor" in the current labor market, as the pandemic looks to have accelerated the end of workers' careers, especially in certain industries".

Is this what I was seeing with my friends?

And if you look around the web, many articles seem to support the idea that COVID-19 has caused a great resignation and retirement rush.

Out of those, The Pew data shows an increase in retirement in the US, and The Times (UK) has an interesting comment that:

"One in ten workers is now planning to give up work between 50 and state pension age, up from one in 25 before the coronavirus crisis, according to research by the UK's biggest investment manager, Hargreaves Lansdown."

Hargreaves Lansdown is reporting a shift in the age of new clients since the start of COVID-19 — see Hargreaves Lansdown results show demographic shift.

So, this might be real. Are witnessing the 'Great Retirement'?

Has COVID-19 changed your retirement plans?

A problem?

The Pew report (The pace of Boomer retirements has accelerated in the past year — Pew) suggests an increase in the number of people retiring (at least in the US) and this is a worry.

I am no economist, but as more people retire, tax income goes down, the workforce contracts, wages go up, and prices go up. The contraction of the workforce could be good or bad news for retirees. The bad news is that the cost of living will rise, and pensions won't go so far. The good news is that there may be more part-time jobs available to boost our income.

There is also the impact of COVID-19 to consider.

Over the last 18 months or so, a lot of us have become used to working from home and a recent piece I read (Older workers could retire later if allowed to work from home) suggests that the 'work from home' culture may delay the retirement of some people. I can see that. I prefer working from home. For the full story on 'delayed retirement', see the Office for National Statistics (ONS) report — Living longer: impact of working from home on older workers.

Useful links

UK Government Website — How to avoid pension scams

Next week

I have a few aches and pains going on, and that has got me thinking about my health and so next week, I will look at health. And, I will also look at some TV programmes.

Thanks

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Until next time,