The odds that Americans 55 and older would leave the workforce over the course of a year increased by 50%, according to a new study from Boston College’s Center for Retirement Research. The 7.6 percentage point increase is compared to before the onset of COVID-19, indicating an unfortunate – albeit expected – effect of the crippling pandemic.
Those most affected include women, Asian-Americans, individuals without a college education and those with difficult or absent work-from-home options, the study said.
Americans who had to stop working or cut their income during the pandemic can cut their monthly costs by paying off high-interest debt. To help relieve and consolidate other debts, they may consider taking out a personal loan. Visit Credible to find your personal loan interest rate without impacting your credit score.
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Older Americans Leaving Work But Not Applying to Social Security
Despite migrating from the current workforce, many of those Americans subsequently fail to take advantage of their Social Security benefits, the study found. It noted that the true probability of retirement only increased by 1 percentage point, and that this was mainly the case among those aged 70 and older.
“This discrepancy between leaving work and retirement can be interpreted in two ways,” it said. “Some older individuals may plan to return to work once restrictions ease and vaccination makes it safer. Others may not plan to return to the workforce, but instead use other sources of income – such as comprehensive unemployment insurance or federal incentive payments – to delay claiming Social Security.”
Retirees can already claim social security from the age of 62, but their benefits will increase every year they wait. Recipients can receive their full benefit once they reach the retirement age of 66. They can even receive a higher monthly benefit by retiring later and getting deferred retirement loans, which are capped at age 70. Americans can set up their Social Security account to see their estimates of their retirement benefits at any age.
If you’ve recently left the workforce and are looking for ways to cut your monthly expenses without taking your full retirement benefits from Social Security, consider consolidating your high-yield debt with a personal loan. Visit Credible to compare multiple lenders at once and choose the one with the best rates for you.
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When will older Americans go back to work?
Many older Americans who don’t take advantage of their Social Security benefits may be able to re-enter the workforce, but it may be dependent on job availability.
“The policy implications of these patterns will depend on older people’s desire and ability to get back to work in the coming years,” the study said. “Even if most people who left their jobs want to get back to work, the cohorts who retired during the Great Recession expressed a similar desire, only to find that no jobs were available.”
The Center for Retirement Research suggested introducing new policy approaches, such as abolishing penalties for beneficiaries who terminate Social Security early.
“If workers are forced to retire early, policymakers can consider options to increase their financial resources,” it said. “For example, the actuarial Social Security adjustment for early and delayed claims currently penalizes early claimants (while rewarding delayed claimants), and can be adjusted to keep lifetime benefits constant.”
If you have left the workforce, are living on benefits or your income has fallen, and would like to see what options are available to you to reduce your monthly expenses, you can contact Credible to speak with a credit expert and discuss all of your get questions answered.
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