The Covid-19 recession, like all recessions, threatens the wealth and retirement security of millions of workers. Job loss prompts people to stop saving, raid their nest eggs or go into debt by falling behind on their rent and mortgage payments. Most workers nearing retirement had insufficient retirement savings even before the recession, and many planned to delay retirement and work longer to save more. But the Covid-19 pandemic and recession made that hopeful plan to work longer even more difficult.
Older Workers: Joblessness and Dropping Out
Even in normal times, the older workers have a harder time finding new jobs after leaving or being tossed out of work. In addition to a virus that puts older workers at much higher risks of death or disability, the “virus recession” put about 3 million jobless older workers at higher risk of never finding another job. About 7.4% of the 38 million older workers would be working today if the economy was as strong as it was in January 2020.
Older workers (ages 55 and over) were hit harder than mid-career workers (ages 35 to 54) in the initial rough phase of the pandemic recession between March and April. The nation enjoyed a partial recovery between May and August, but older workers’ labor force participation rate kept on falling since. The older labor force participation rates reached their lowest point in January 2021.
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