The overall unemployment rate skyrocketed up to 14.7 percent this past April. This is up from a 4.4 percent unemployment rate in March. The coronavirus pandemic has brought an increase of nearly 16 million unemployed Americans in the last month alone. These unprecedented job losses are being experienced by people across a wide array of occupations and in all age groups, but older Americans are experiencing a hard blow not only from the job front, but from the COVID-19 virus itself.
Seniors face unemployment
While the unemployment rate is now highest among people ages 16 to 24, the next highest rate of unemployment is among the oldest age cohort, those aged 65 and older. The unemployment rate was up 12.1 percent from March to April of this year, going from 3.7 percent to an outrageous 15.6 percent.
From March to April, 1.2 million adults ages 65 and older lost jobs, as did another 2.4 million people ages 55 to 64 years old. Altogether, people 55 years of age and older account for just under one fourth of all Americans who lost their jobs in April, which is proportional to their share of the workforce.
More than 1 in 5 of the nearly 23 million Americans who are now unemployed are older adults, 55 years of age and older.
Threatened with loss of health insurance
Another major challenge is that people who lose their jobs often lose health insurance. For those who are more likely to contract COVID-19, such as the elderly and the immune-compromised, losing healthcare coverage in the midst of a pandemic is especially scary. Older adults ages 55 to 64 may be able to purchase COBRA from a former employer or enroll in Medicaid, depending on their individual circumstances.Early Retirement
With millions of older adults suffering job losses due to the economic downturn of COVID-19, many are resorting to dipping into retirement savings or claiming Social Security benefits prematurely. Doing so, early retirement threatens the future of social security.
Older workers may be confronted by difficult questions. If I lose my job, can I find another one? If I still have work, will my wages go down because of increased competition for those positions? Should I just retire earlier than I planned? Can I afford to retire early?
“No one that was born 64 years ago who’s about to retire has control over what happened today,” said David Blanchett of Morningstar.
Check out Morningstar’s free podcast and hear David Blanchett, head of retirement research for Morningstar Investment Management LLC., discuss his research on retiree spending patterns, asset allocation, and mitigating the risks in a plan during the COVID-19 pandemic.