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It's not just Covid-19 that boomers have to worry about—it's their retirement, too. Not only are the older members of this generation more at risk from the coronavirus, but the accompanying market panic may also have robbed the younger boomers of their chance to retire.
A blog post from the Center for Retirement Research at Boston College points out that lots of boomers already had the deck stacked against them because of too little retirement savings, but they could have been trying to play catch-up in their retirement accounts by taking on riskier investments—which may now have tanked.
According to the blog post, "Economists estimate GDP will contract in the second quarter at an unprecedented 10 percent to 24 percent annual rate." And it quotes Evan Beach, a financial planner in Alexandria, Virginia, predicting that "People are going to get fired, and the people who get fired are not the 25-year-olds making $60,000. They're going to be the 50- and 60-year-olds making $120,000."
While some boomers will be checking the want ads and trying to find work to replace their suddenly lost asset pool, others will find themselves "retired"—whether they want to be or not—due to an inability to find work to replace whatever job they had. And those who do might be forced to claim Social Security earlier than they'd intended, locking in a smaller benefit for the rest of their lives but seizing the only opportunity they may have to bring in enough income to survive.
A Bloomberg report argues that not only do older people need to go back to work once the shutdown is lifted, but the economy needs them to go back to work. Losing the pool of workers the size of boomers delaying retirement—those over 55 represent nearly a quarter of the labor pool means that the workforce, already in short supply before the crash, will be even more shrunken.
There are plenty of other reasons to hope that older workers can return to the workforce. Those short on retirement funds before the crisis will be in even more dire financial straits, but jobs could help them with an economic lifeline. Businesses need their expertise and experience, even if they can't use them today—in fact, if businesses lose too many experienced personnel, they themselves may not survive. And yet another reason: "Countries confronting aging and slow population growth need to keep older workers employed to sustain their economies."
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
