
Pandemic treating affluent differently, empowering them to leave corporate life early

A recent government survey is showing that more Americans are contemplating early retirement, given the pandemic and soaring stock and real estate values.
The survey showed that about 2.7 million Americans 55 and older are contemplating retirement years earlier than they would have imagined, due mainly to the COVID-19 pandemic. According to the survey, these potential early retirees are more likely to be White, a group that typically has a larger amount of accumulated wealth.
Many of those surveyed cited robust retirement accounts and COVID fatigue for their early exit from the work force. The research highlights that the pandemic is treating the affluent differently, empowering them to leave corporate life early, while others, who lost their jobs had to delay retirement or grew discouraged and retired before they were ready.
Early retirements will deprive labour market many productive workers
The study also underscored the point that early retirements, whether desired or forced will deprive the labour market of some of its most productive workers and have an impact on the economic recovery that is still too early to evaluate. Financial advisers are seeing a new “life-is-short” attitude among clients with enough money socked away to carry them through retirement.

Kenneth Van Leeuwen, founder of financial services firm Van Leeuwen & Co. in Princeton, New Jersey told Bloomberg that the prospect of going back to the daily grind is going to be “a really tough pill for a lot of people to swallow”.
He pointed to one client, an executive, whose stock portfolio has performed well and is retiring at 48, as the prospect of having to go back to traveling 10 to 12 nights a month isn’t appealing anymore.
A November study from Pew Research Center found a surge in the number of baby boomers – those born between 1946 and 1964 – reported being retired compared to previous years. The study found that 1.2 million more Americans retired than the historical annual average.
People expecting to work beyond age 67 fell to a record low of 32.9%
The number of people expecting to work beyond age 67 fell to a record low of 32.9 per cent last month, according to a New York Federal Reserve survey. In addition, about 2.7 million workers age 55 and older plan to apply early for social security benefits, almost twice as many as the 1.4 million people in the same age group who anticipate working longer, according to a recent US Census Bureau survey.

The unprecedented surge in shares and home values during an economic crisis is easing the retirement path for those who have investments. Assets for Americans ages 55 to 69 rose by US$4.2 trillion in 2020, including a US$2.2 trillion increase in corporate equities and mutual fund shares in addition to a US$250 billion gain in the value of private businesses, according to data from the Federal Reserve.
The number of business owners who say they plan to retire sooner than expected has doubled since last August, according to a survey by financial services firm Wilmington Trust.
“Dealing with two major economic events in less than 15 years may have them wondering if it’s time to take money off the table, especially as they near retirement,” said Stuart Smith, a national director of business value strategies at Wilmington Trust.
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