(Newswire.net — August 3, 2020) — While Baby Boomers certainly aren’t the only members of the workforce to be affected by the crisis, being made redundant is especially an issue for them. This is because, generally speaking, Boomers find it difficult to change their career path and enter a new field, so they may struggle post-coronavirus to reenter employment.
This may lead to some Baby Boomers retiring early, which is likely to result in them having a lower standard of living in retirement as their savings have to stretch further and because they are missing out on years of work during which they would have been adding to their retirement investments like 401k’s.
Baby Boomers have become known as the wealthiest generation and for that reason, they have become the target of many marketers who hope to capitalize on that wealth. However, if Boomers opt for early retirement, that personal wealth could be far less than they had planned for. The result would be that Baby Boomer buying habits will need to be adjusted, especially when it comes to things like travel, real estate, cars, and other luxury items.
Why Might Boomers Struggle After COVID?
There are a few reasons which may make it difficult for laid-off Baby Boomers to re-enter employment once the US economy recovers from the pandemic.
Economists have suggested the crisis will potentially lead to long term changes to the structure of the US economy – and it may take a long time for some jobs which were performed by Boomers prior to the COVID-19 pandemic to be “recreated.”
Now, this doesn’t necessarily mean Boomers who had such jobs need to retire. Instead, they could try to find a different type of job, perhaps one in a different industry altogether.
The difficulty with that is Baby Boomers are already well established in their careers and may be less able or willing to learn new skills (though this isn’t always the case).
Another, perhaps more important reason that Boomers sometimes struggle to enter employment in a new field or role is that some employers are less willing to take on older workers and train them because it’s not always financially viable to train someone for several months if they are just a few years away from retirement.
Furthermore, some analysts and economists have said they expect older workers who reenter employment to potentially earn considerably less than they did before the pandemic, as we saw in the years after the Great Recession.
Are Boomers Already Retiring Early?
Many Boomers will manage to reenter the labor force once the pandemic passes, and the economy gets going again, but how many will end up retiring early?
Official labor statistics show that, as of May 2020, roughly 12 percent of Americans aged 55 or above were unemployed – an approximately five-fold increase on the 2.6 percent unemployment rate this age group had back in January.
The labor force participation rate – which is a measure of the percentage of people working or seeking employment – for 55s and over has fallen from 40.3 percent to 38.5 percent over the course of the COVID-19 pandemic.
This indicates that while most Boomers who have been made redundant are currently still looking for work, a few hundred thousand appear to have lost their appetite for work (at least temporarily) and are potentially looking to retire early.
A Quick Summary
- Coronavirus-induced lockdowns across the US have dealt a hard blow to employment figures.
- Some Boomers who have been made redundant are seemingly considering retiring early, as they believe they will struggle to find employment after the pandemic.
- There are several reasons why older Americans may struggle to find work post-COVID.
- For example, some employers are likely to prefer to train and invest in younger workers who are likely to stay at the company for a more extended period of time