Seattle Times: Pandemic Playing Havoc With Seniors’ Retirement Plans

The ongoing economic shock of the COVID-19 coronavirus pandemic has played havoc with the financial plans of many Americans, but seniors and those at or near retirement seem to be hardest hit. Strained financial resources have become stressed even further, with the pandemic exacerbating the already shaky stature of many seeking to put their working lives behind them to enjoy a well-earned retirement.

That’s not to say things are entirely without hope, but that hope is at least tempered by some of the necessary decisions that must be made because of economic instability, according to a recent story in the Seattle Times.

“The coronavirus pandemic has left the retired (and those who soon hope to be) in limbo, with major pressures coming from every direction — financial, medical and emotional,” writes the Times’ Chris Talbott. “And, as it has in so many parts of our society, the pandemic has exposed the seams in a system that already felt pretty shaky for all but the richest retirees.”

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Some of the stories shared by Seattle-area retirees in particular include the necessity of taking odd jobs to make ends meet, and increasingly tight budgets on fixed-incomes that have caused many seniors to fear for the potential loss of their quality of life. Seattle-area small business owner Glenda West confided in Talbott about the new difficulties she faces as a result of the pandemic, which has thrown a meticulously-planned retirement into doubt.

“Even at the beginning of the year, I would have been saying, ‘Yeah, I have a steady plan for my retirement. I know how much I’m going to put away a year. I’m going to be fine,’” West describes. “And now there’s no foreseeing that we’ll even be able to save anything this year. And what will the years coming look like? I may never be able to put that much away again. I mean, you kind of worry that your future could be tanked.”

Still, history has at least indicated that recovery is possible and could be on the horizon, even if that recovery may not necessarily be easy.

“History shows that in a downturn, and even a really serious downturn, that the market does recover, right?” said David C. John, a senior strategic policy adviser at the AARP Public Policy Institute to the Seattle Times. “It usually takes some time, and just like watching the market from hour to hour, there are going to be ups and downs. It’s not going to be a smooth recovery up or a precipitous elevator drop down. Over time, your retirement savings will build back up.”

Still, retirees are often advised to tread with caution. A study released by the New School’s Schwartz Center for Economic Policy Analysis — as cited by Talbott in the Seattle Times — indicates that if the overall unemployment rate reaches 25% then it will result in roughly 10.5 million older American workers losing their jobs.

“And those who don’t lose their jobs are at risk of losing their retirement coverage, which was already at a historic low of 41% in 2019,” Talbott writes.

Read the article at the Seattle Times.

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  • The Seattle Times (ST) attempts to limit his article to those who live in the state of Washington. In fact the name of his article is “‘What will the years coming look like?’: Coronavirus has thrown a wrench into Washingtonians’ retirement plans”

    Yes, some of the points are universal throughout most of the US but despite its almost 8 million residents (13th largest state by population) and with the port of Seattle, Boeing, and Microsoft, the economic environment in Washington is much different than Oregon, Idaho, or British Columbia, its two neighboring states and its sole neighboring Canadian Territory. Even California’s economic environment is much different than Washington’s as are those of the other US states.

    One particular economic situation that the ST writer points out is that many retirees have lost their part-time jobs. Many of those are in fear of returning to their jobs as the work environment reopens because of the potential health dangers from the likely return of the pandemic. As a result many seniors are no longer as optimistic about their retirement as they were in February.

    Confusingly, the AARP official combines “retirement assets, your savings plus Social Security” in the following sentence: “That allows your retirement assets, your savings plus Social Security to recover some before you start to draw it down on a regular basis to live off.” While retirement assets may need to recover, does Social Security? Yet how did “your savings” diminish in value due to the pandemic that it needs to recover? While he might be inferring that those assets were spent during the Stay at Home mandates, concluding that from what he writes is nothing but speculation. In an attempt to be succinct and concise, the AARP official ends up being terse and confusing.

    Further the conclusion made by the ARRP official that “over time, your retirement savings will build back up” is just plain confusing based on his quoted sentence in my prior paragraph. There he separates retirement assets from “your savings” and Social Security. So what are “retirement savings”? While one can speculate what the author meant, it is still nothing more than speculation. His comments are among the worst I have read in years by anyone who is considered to be a retirement financial expert.

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