The coronavirus pandemic has altered the expected retirement age for Americans.

Americans' expected retirement age has shifted due to the pandemic.

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By the end of the decade, roughly 21% of the population will be 65 or older, up from the current 15% - a trend predicted by the Census Bureau. While most non-retired adults possess some form of retirement savings, only around 36% think their savings are where they should be.

A recent study by economists at the Federal Reserve Bank of New York demonstrates that this retirement savings shortfall does not seem to have impacted when people intend to retire or semi-retire. In fact, the researchers discovered that since the pandemic started, employees have reported substantially lower predictions of continuing to work full-time after reaching ages 62 and 67 (the former being full eligibility for Social Security benefits). Strikingly, they noted that this trend is most prominent among low-income and female workers.

The pandemic ushered in a wave of "The Great Resignation," as nearly 50 million individuals left their jobs in the two years following its onset. Contributing factors included stress, general job dissatisfaction, or family obligations like child or elder care needs. With a tight labor market, many workers found better job opportunities, too, with improved pay.

Although the pandemic has come to an end, and the United States economy has swiftly recovered from the 2020 recession, the labor market has continued to experience unique transformations. The NY Fed economists Felix Aidala, Gizem Kosar, and Wilbert van der Klaauw observed this, as they noted that retirement-age full-time employment predictions dive-bombed in March 2020 and have declined ever since. The survey reached its all-time low in March 2024, with only 45.8% of respondents intending to continue working full-time beyond the age of 62. These expectancies had averaged 54.6% in the six years prior.

"The decline is widespread across age, education, and income brackets, with workers under 45, uneducated, and earning less than $60,000 per year exhibiting slightly more significant decreases than their counterparts," wrote the economists.

What this means: Although the Great Resignation has slowed down and wage growth has started to ease, the New York Fed's survey responses still indicate that expectations of working full-time beyond ages 62 and 67 have persistently declined. While it's uncertain what's driving this trend, it could have a significant influence on the labor market.

"The pandemic-induced shift in retirement expectations might continue impacting the labor market in the years to come," they stated. Furthermore, this change could have considerable macroeconomic implications since consumers would potentially modify their decisions about consumption and savings based on their expectations.

It could also seriously affect the timing of Social Security claims. Social Security benefits present approximately 90% of income for 12% of older men and 15% of older women, according to the Social Security Agency. Nevertheless, the Social Security trust fund is predicted to be depleted by the mid-2030s, meaning only a fraction of retired individuals will receive their anticipated benefits. Lawmakers have faced a long-standing stalemate over how to address this issue.

A notable update: This is only research on expectations, and not evidence of actual changes in retirement behavior.

The debt balance has grown, as have delinquencies for Americans

Despite the robust economy, thriving job market, and persistent spending habits of consumers, more Americans are struggling financially - particularly with credit cards. As debt balances increased in the first quarter of 2024, delinquencies climbed as well, the Federal Reserve Bank of New York disclosed on Tuesday. The rate of credit card balances in serious delinquency (90 days or more late) reached its highest mark since 2012.

"During the first quarter of 2024, credit card and auto loan transition rates into serious delinquency continued to rise across all age groups," Joelle Scally of the Household and Public Policy Research Division at the New York Fed explained in a statement. "The growing number of missed credit card payments implies that some households are facing financial hardship."

Total delinquency rates increased to 3.2% of total outstanding debt in some state of delinquency during the first quarter, the NY Fed's latest Quarterly Report on Household Debt and Credit revealed. Transitions into delinquency (severe or not) increased across all loan types.

Walmart made an announcement on a Tuesday, revealing plans to cut several hundred corporate jobs and relocate most of its remote workers to their headquarters in Bentonville, Arkansas. This news was reported by Parija Kavilanz of CNN.

Walmart's chief people officer, Donna Morris, shared the decision to move employees and invite remote staff back to the office through a company memo distributed to workers on the same day. According to the memo, this approach is intended to foster better teamwork, enhance invention, and accelerate progress.

"Relocating people and inviting others back to the office will help us collaborate more effectively and facilitate innovation. It will also contribute to strengthening our culture and nurturing our associates' growth and development," Morris stated in the memo.

The shift primarily affects employees from Dallas, Atlanta, and Toronto offices, with a majority of these individuals being reassigned to the Bentonville headquarters. However, some will move to Walmart offices located in the San Francisco Bay Area and Hoboken, New Jersey, as well as the New York area.

Moreover, some departments within the company are set to eliminate a significant number of their roles on campus. However, Walmart emphasizes its commitment to helping everyone impacted by these changes.

The multinational retail company is set to publish its quarterly earnings report on a Thursday. This decision to lay off employees comes shortly after Walmart had announced its intention to exit its online healthcare project and close all 51 of its healthcare facilities in six different states.

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Some individuals are considering investing their retirement savings to make up for the shortfall, as many feel their savings are inadequate. This trend has been observed despite the impact of the pandemic on retirement expectations.

The shift in retirement expectations amidst the pandemic has also led some businesses to consider offering early retirement packages as a way to manage their workforce and address the expected labor shortage.

Source: edition.cnn.com