The massive labor disruptions caused by the pandemic led many to speculate that those disruptions would also lead to mass retirement, but new data from the U.S. Census Bureau tells another story.
To be sure, unemployment increased from 3.5% in February 2020 to a peak of 14.7% in April 2020 amid the workplace shutdowns and shifts in demand. But based on respondents’ labor force status in 2020 (the first year of the pandemic), data from the Bureau’s 2021 Survey of Income and Program Participation (SIPP) shows only modest pandemic-related effects on retirement.
When asked how the pandemic affected the timing of their retirement, only 2.9% of adults ages 55-70 employed in January 2020 said they retired early or planned to retire early due to the pandemic. In addition, only 2.3% said they either delayed or planned to delay retirement for the same reason.
“Retirement trends were remarkably stable during a period of upheaval in the labor market overall,” writes Daniel Thompson, survey statistician in the Bureau’s Program Participation and Income Transfers Branch.
In asking respondents about their employment and labor force participation during 2020, the share of respondents ages 55-70 who reported retirement as their reason for not holding a job fell modestly from 29.4% in January to 28.2% by December. Moreover, the Bureau notes that there was no discernible change from January through the first several months of the pandemic.
After the pandemic began, the Census Bureau added new questions to the 2021 SIPP that asked respondents how the pandemic affected them. One question asked respondents ages 55 and older how specifically the pandemic affected their retirement timing, or for those respondents who had not yet retired, their expected retirement timing.
According to these findings, the changes were modest. Among those employed in January 2020, the impact differed by age. Adults ages 62-65 years old reported the most changes, with 4.6% saying they had retired early or planned to retire early, while 2.9% said they had delayed or planned to delay their retirement.
Not surprisingly, changes to retirement timing in response to the pandemic varied by the health rating respondents reported. Those reporting poor health skewed toward early retirement, with 5.6% reporting that they had retired early or planned to retire early due to COVID-19 and only 0.6% reporting that they had delayed or planned to delay retirement.
Retirement Timing by Industry
The Bureau also found modest changes regarding the pandemic's impact on retirement timing based on industry type..
Workers in education jobs more often retired or planned to retire earlier (4.3%) rather than delayed or planned to delay retirement (2.1%). In addition, workers in hospitality and other services were also more likely to move up than delay their retirement—3.6% reported they had retired early or planned to retire early, while 1.7% reported they had delayed or planned to delay retirement.
Earnings and Retirement Timing
Responses varied somewhat by earnings, based on monthly earnings from wages, salary, tips and self-employment, the Bureau further reports. Respondents who earned the least were more likely to say that they moved up their retirement or planned retirement, as compared to delaying retirement.
Among the first quintile (the lowest earners), 3.4% said they planned to retire early compared to 1.8% who said they would delay retiring. In the second quintile, the difference was 3.7% and 0.9%, respectively. Meanwhile, differences among higher earners (the third, fourth and fifth quintile) were not statistically significant, the survey found.
What Is the SIPP?
The SIPP is a nationally representative longitudinal survey administered by the U.S. Census Bureau that provides comprehensive information on the dynamics of income, employment, household composition and government program participation. Beginning with the 2021 interview, the SIPP asked a series of questions sponsored by the Social Security Administration (SSA) about employer-sponsored retirement and pension plan coverage. These questions are a revised version of questions included in the 2014 SSA Supplement and the Retirement and Pension Plan Coverage Topical Module administered as far back as the 1984 SIPP panel.
Thompson notes that the COVID-19 retirement questions were added late in the development of the 2021 SIPP survey and therefore did not undergo as rigorous development and testing as other SIPP content. However, question nonresponse rates and field notes from interviewers suggest less than half a percent of unweighted respondents were confused by the questions or did not know how to respond.
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