The Impact of COVID-19 on Retirement and Aging
The pandemic has affected many areas of our lives and will continue to have an impact for years to come, from solving unforeseen problems to accelerating changes for issues that were already known. While COVID-19 has created uncertainty with regards to retirement, it has also given many people a reason to consider how they want to live their lives and where they want to age.
1. More American seniors will choose to age at home.
Since so many COVID-related deaths happened at long-term care facilities in the U.S., more older adults are likely to opt for at-home care. This could result in fewer nursing homes, allowing them to be better equipped and staffed, as well as additional resources to help with aging at home. This may also result in expanded community-based programs that help with medical services, daycare, home care, and transportation for the elderly, as well as federal and state programs that pay family caregivers. Moving the focus away from nursing homes may help Americans rethink age segregation in other areas of our society, allowing for more day-to-day contact between younger and older generations.
2. Seniors will reap the benefits of a technology boom.
While technological innovations are often marketed toward younger generations, the pandemic has forced entrepreneurs to consider what older adults need to age at home. Perhaps the biggest change has been the growth in telemedicine, which has allowed vulnerable populations to meet with their doctors virtually. Additionally, wearable devices and diagnostic tests can communicate an individual’s blood pressure, weight, and other vital signs remotely. Technology can also be used to help combat isolation with innovations like traveling virtually with a tour guide, helping children with homework, and practicing English with foreign-born students.
3. Life expectancy will decrease.
In addition to the significant number of COVID-related deaths and long-term physical damage from the virus, the pandemic is also affecting our ability to participate in activities like socializing, exercising, and volunteering. These activities are important for our mental and physical health, especially for older adults. In fact, some studies show that loneliness may be related to a higher risk of depression, cognitive decline, heart disease, and death.
4. People will have a better sense of how they want to spend their time.
Working from home as well as periods of unemployment can help people gain insight into what they will want to do in retirement. Some may want to continue working, while others are exploring new hobbies. Although the pandemic has interfered with retirees’ plans to travel and visit family or friends, it has allowed many of them to reevaluate their finances, plans, and values. COVID-19 has also reminded many older Americans that life is short, inspiring them to reconsider how they want to spend it.
5. More Americans are making end-of-life plans.
Most people often put off planning for end-of-life care and expenses. During the pandemic, however, seniors and even younger individuals are searching for and downloading materials for end-of-life planning. It’s a difficult subject but one that is important to plan to help loved ones before and after death.
6. We are embracing healthier lifestyles.
In addition to being older, underlying conditions like diabetes, heart conditions, and obesity put you at a higher risk of dying from the coronavirus. While many of these conditions may be beyond our control, diet and exercise play an important role in reducing our risk of disease. Many Americans are becoming more aware of these health problems and taking steps to become healthier.
7. We need to save more for retirement.
Although the stock market will continue to improve, the pandemic and resulting economic crisis caused lower bond yields, which means future returns will likely be lower than in the past. Retirement strategies that may have worked before, such as the 4% rule, may not work in the future.
8. 401(k) funds may shift to multipurpose accounts.
Many Americans have been directly impacted by the economic crisis, which has helped them realize the importance of establishing an emergency fund before a 401(k). Funds from a 401(k) account can be difficult to access before retirement, so workers are looking at additional options. In fact, some employers are already using different flexible savings accounts that allow employees to funnel their salary deferrals to a variety of goals other than retirement.
9. More people will work longer.
The percentage of older adults in the workforce has steadily increased since the 1990s, but this trend will accelerate due to the pandemic. The future is uncertain, so many older adults will cling to their jobs. Plus, with so many companies allowing remote work and flexible scheduling, it is easier than ever before for older people to continue working.
10. We will view aging differently.
Although the pandemic has reinforced ageist stereotypes and increased intergenerational conflict, it has also helped many people recognize that older adults are more psychologically resilient in times of crisis and uncertainty. COVID-19 has made many of us realize how much we need each other, regardless of age.
Read the full article from the Wall Street Journal.Read More