The COVID-19 pandemic threw plenty of curveballs at the economy and the American population. While many people lost their jobs, others willingly retired early.
Alliance for Retired Americans Executive Director Rich Fiesta discussed the issues that may be created by mass amounts of early retirement. He also discussed Social Security, and how the pandemic will affect the economy long term and more.
COVID-19 causes early retirement
Fiesta said the U.S. saw a large spike in unexpected retirements in 2020. An extra 1.7 million Americans retired earlier than expected. While many of these were older workers, he said many were not yet eligible for Social Security benefits, causing additional problems.
The Social Security trust fund is now missing contributions from 1.7 million more Americans than expected. Fiesta fears this will harm retirees in the short term but will smooth out over time. Further, retirees without a college degree will struggle more than their college educated counterparts.
Fiesta said there are few short term fixes to the problem. However, he said raising wages to increase contributions can help.
The COVID-19 pandemic ripple effect
The COVID-19 pandemic will have some lasting effects on the economy but it will eventually return to normal. Fiesta said the short term may be rough for some Americans.
To accelerate the recovery, Fiesta suggested raising the Social Security cap. Having more workers paying into the fund will help replace those who retired early. Also, expanding and increasing unemployment will help. Older workers struggle to return to the workforce the most, as they are frequently discriminated against or have a limit on the tasks they can physically perform.