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Title: COVID-19 Is Not a Retirement Story

Citation Type: Working Paper

Publication Year: 2021

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Abstract: A hot topic these days is how COVID-19 and the ensuing recession have affected retirement. The surprising answer may be “not very much.” On the benefit side, Social Security payments continue to go out each month, and 401(k) balances appear relatively unaffected. On the income side, the impact on Social Security’s finances has been minimal, and employee and employer 401(k) contributions remain relatively steady. In terms of the labor market, recessions inevi- tably increase unemployment, but this recession has not hurt older workers more than other groups. The conclusion that COVID is not primarily a retirement story does not mean that all is right with the world. The problems confronting the retirement system before the pandemic remain. Social Security continues to face a 75-year deficit and the depletion of the trust fund in the mid-2030s. Employer plans con- tinue to face inadequate balances, a major coverage gap, no decumulation mechanism, and low interest rates. And older workers continue to face difficul- ties in finding new jobs, causing many to retire too early. Most important, the reason for COVID’s lack of impact on retirement is that people who have the least have borne the brunt of the downturn.

Url: https://crr.bc.edu/wp-content/uploads/2021/02/IB_21-4.pdf

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Authors: Munnell, Alicia; Chen, Anqi

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Publication Number: 21-4

Institution: Center for Retirement Research at Boston College

Pages: 21-25

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Data Collections: IPUMS CPS

Topics: Aging and Retirement, Poverty and Welfare

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