The COVID-19 pandemic has had an outsize effect on people 50 and older: Not only did it impact older adults’ health more severely than younger ones, but it also forced many into early retirement and prompted others to take withdrawals from their savings earlier than they had planned.

“The prospects of a secure retirement for millions of workers will be even more precarious following the pandemic, and more Americans of all ages will need to rely even more on Social Security’s modest benefits for an even greater portion of their retirement security,” David Certner, legislative counsel and director of legislative policy for government affairs at AARP, told the Senate Committee on Finance on July 28.

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The pandemic effect on older Americans

The national unemployment rate climbed from 3.5 percent in February 2020 to 14.7 percent in April. It has since fallen to 5.9 percent. But 55.3 percent of the long-term unemployed — those who have been looking for work for 27 weeks or more — are age 55 or older.

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As a result, many workers had to tap their retirement savings, or stop saving for retirement, to make ends meet. According to a June 2020 survey by TD Ameritrade, 23 percent of respondents ages 55 to 73 have retired early, or considered retiring early, because of the pandemic. Nearly one in four adults ages 25 and older surveyed by AARP in April 2021 dipped into their retirement savings or stopped contributing to their retirement accounts during the height of the pandemic.

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“Earlier retirements and emergency withdrawals from retirement accounts will likely prevent these workers from accumulating additional years of wages and savings, resulting in reduced pensions and lower monthly Social Security benefits for life, as well as the need to spend down their retirement savings earlier than anticipated,” Certner said.

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