By the end of 2021, the ‘Great Resignation’ had already led to more than 3 million American workers announcing their retirements. While this trend has recently shown some signs of slowing, such a massive wave of retirements has hit some industries much harder than others.1 What should you know about the Great Resignation, and what plans should you put into place if you are eager to join this exodus?
Why More People are Retiring Early
Economists and other experts have identified a few factors which contribute to this massive departure from workforces around the country.
- The COVID-19 pandemic led some to withdraw from the workforce due to health concerns. This impact was especially felt by "essential" industries which didn't offer much flexibility in remote or on-site work.
- A rapid surge in housing values and stock prices during the pandemic accelerated the retirement timeline for some younger Baby Boomers, some of whom found themselves hitting their "retirement number" earlier than expected.
- Some workers dealing with "long COVID" found themselves unable to continue working in a highly physical job.
There is evidence that some of these new retirees have already reversed themselves and decided to look for ways to return to the workforce in some capacity.2 However, this may mean a different position or only a part-time position instead of a previous full-time schedule.
Early Retirements Impact Different Industries
Although there have not been any comprehensive studies about industries hardest hit by the Great Resignation, a few trends have already emerged.
- Vulnerable older workers, or those in lower-wage jobs lacking college degrees, were the most likely to stop working during the pandemic.
- The shift to remote work has led to an undersupply of workers for retail, food service, and other industries that rely heavily on entry-level workers.
- The pandemic's strain on healthcare and education has also led to the early retirements of teachers and administrators, plus nurses, physicians, and other health professionals.
Don't Retire Without a Plan
While the Great Resignation can mean that you will have plenty of company if you plan to retire soon, such an important decision should be made in a measured way. Before retiring, it is crucial to work with a financial professional and develop a plan to put in place. This can help you avoid unnecessary stressors like deciding how to pay for healthcare or steps to mitigate your tax burden. Contact us for further assistance.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
We suggest that you discuss your specific tax issues with a qualified tax advisor.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
LPL Tracking #1-05314916
1 Covid Early Retirees Top 3 Million in U.S., Fed Research Shows, Bloomberg
2 Millions retired early during the pandemic. Many are now returning to work, new data shows.