Pandemic Perspectives

Did Covid Alter Our Perceptions Of A Safe Retirement?

Pre-retirees and retirees alike are taking a fresh look at their income timeline

by Mike Janky

Mr. Janky is a Registered Investment Advisor and principal with MJ Wealth Planning, in Tucson, AZ. he holds multiple designations including Chartered Financial Consultant, Chartered Life Underwriter, Chartered Advisor for Senior Living, Retirement Income Certified Professional, Registered Health Underwriter, Certified Fund Specialist and Certified Annuity Specialist. Visit

By early 2020, the world started to change forever with the spread of Covid-19. We knew nothing about this virus, as many people around the world lost their lives or had family or friends that were infected with this new enemy.

Three years later, we know more about the virus and other mutations of the strain. But there is still a lot to learn about the lasting long-term side effects. We have taken steps to minimize our exposure whether it be to stay home more often, wear a mask, get vaccinated… or all the above.

More importantly, what we are starting to see now is the pandemic’s impact on our financial health. Many decided to retire early or simply just leave the work force. The work landscape shifted, as employees began working from home… in situations that could accommodate it. How this changed the financial picture for many people is now starting to clarify, and we are faced with the question of what actions we can take to minimize this impact on our retirement.

What Are The Symptoms?

The early stages of Covid-19 were fear and confusion. We had no idea of what this was and how challenging it would be for the world. As people started to flood the hospitals and emergency rooms with symptoms of fever, shortness of breath and difficulty breathing, the initial stages of the virus had the world in a panic.

As death tolls rose, countries began mandatory home lockdowns. Around the world, people were stocking up on supplies that left the store shelves empty. The medical profession scrambled to get a grip on this virus and had very different views on the severity and treatments. Depending on what news source you listened to, you would hear things like “this is no worse than the common flu” to “this is the deadly virus we have faced in the modern era”. Information was all over the board. Pharmaceutical companies raced to find a vaccine that could minimize the severity of being contracting with the virus. Three years later, and through a lot of trial and error, we have a much better grasp on our new ‘foe’.

So how did this change the retirement landscape? As the number of infected people rose in the early months of 2020, the stock market began to tank. The S&P 500 went from a close of 3,386 on February 19th all the way down to 2,237 on March 23rd. In a little over a month, the index dropped over 50%! Many industries struggled with lack of inventory and workers were too scared to leave their homes.

In the US, the Government stepped in with stimulus checks for individuals and other assistance for employers. This brought some calmness to the market and saved some companies from going under. The stock market is currently battling headwinds from much higher interest rates and now inflation. Over the last 2 years, we have seen inflation rise 7% in 2021 and 6.5% in 2022. The country’s debt numbers are also climbing at an alarming rate. Currently, the National debt is over $31 Trillion dollars and growing. That equates to about $95,000 for every single person in America. So how does all this weigh into the decision of retirement? The fear of leaving that high paying position will keep people up at night and working longer than they like. It’s not uncommon to see people working until their health starts to fail and then retire. By that time, the golden years become very short and in some cases, non-existent. With all the challenges of retiring, what should a person do? Let’s look at five options that could be considered.

What Are The Options?

Option 1- Continue To Work Full Time A Little Longer

Many people decided that due to inflation and the volatility of the market over the last two years, it’s best to put off retirement. A big part of that decision centers around health care. Having group health insurance is a huge motivator for the pre-65 age group. Once age 65 is reached, Medicare kicks in for most people and the cost of health insurance is very manageable. Benefits of continuing to work along with the insurance is that every year one works, is one less year of using assets to supplement income and another year to put money aside for retirement. People that enjoy their jobs and love the identity it gives them should continue to work. Our population continues to live longer and retiring too early can force a person to reduce their lifestyles during retirement unless they have planned accordingly. If the stress of the job is too much, one should discuss options with their employer. Maybe a reduction in hours or a consulting role is possible. Valued employees have leverage with the employers here. If a compromise is not possible, then other companies in the industry might be an option.

Over the last 2 years, we have seen inflation rise 7% in 2021 and 6.5% in 2022. The country’s debt numbers are also climbing at an alarming rate. Currently, the National debt is over $31 Trillion dollars and growing...

Option 2- Begin Social Security Benefits Early

If taking Social Security benefits before full retirement age (67 if born in 1960 and later) means that a person can leave their job and start enjoying retirement earlier, then this option should strongly be considered. It’s not uncommon to hear blanket statements like “you should always wait until full retirement age to take Social Security benefits”. It really is up to each situation and in many instances, it’s a big advantage to begin taking benefits before 67. If a person begins benefits at 62, it is true there is a 30% decrease in their benefits. This decrease is for the life of the person (and may impact their spouse’s benefits should they pass away before their spouse) but what if they don’t have a long life expectancy? Beginning at 62 will give you 5 more years of benefits. If a person lives to age 75, they would receive more benefits than if they waited until 67 to start receiving Social Security. If a person lives to age 80, their total benefits paid out will be lower if they start at 62 but not by a lot. The ability to enjoy retirement earlier may well be worth the tradeoff.

Option 3- Unretire And Get A Part-Time Job

Having a career that is high-paying often is high-stress. The two usually go hand in hand. Stress is a direct contributor to heart attacks, strokes, anxiety issues, and the list goes on and on.

Many companies over the last few years downsized their workforces while pushing more responsibilities on their remaining employees. Meanwhile, stockholders continued to demand profits — creating downward pressure on all employees and highlighting the fact that many often stay in these high-pressure jobs for fear of losing their benefits like health insurance and their 401(k). Still, when you consider retiring from high-pressure positions and then search for part-time employment, there are some attractive benefits:

  • health insurance (if enough hours are worked)
  • having a purpose each day or several days a week
  • supplementing income
  • pick an industry you have a passion for
  • social interaction
  • employers are looking for responsible part-time employees

The idea of retirement for most is exciting but the reality is after doing the “bucket list” items, life can become uneventful. Going back to work part-time can bring back a sense of self-worth and a reason to get out of the house and do something purposeful.

Option 4- Spend Down Assets

Many retirees want to leave a legacy. The thought of helping grandchildren pay for college or helping an adult child who has been financially challenged over the years is very heart-warming. Spending assets on oneself vs. leaving a legacy can allow a person to work fewer years and enjoy more years in retirement without having the fear of outliving their money. A lot of people are torn between wanting to leave some money behind and spending that money on themselves. Usually that money was hard-earned and should be used to enjoy the remaining years of one’s life. Depending on the health of the individual, they can purchase life insurance on themselves and use pennies on the dollar to leave a legacy and still be able to afford a comfortable lifestyle at retirement. This can be a win-win!

Option 5- Adjust Your Lifestyle… And Make Smart Choices

Is a new car every two years really needed? What about the country club? How many cruises can a person take? Depending on the amount of disposable income and assets, one can still enjoy many of these things if they are smart about it. The stress of worrying about running low on assets is a real issue. Regarding a new car, an alternative may be to buy a “slightly used” different car every few years. Most vehicles depreciate 20% or so the minute you drive them off the lot. Are you driving thousands of miles each year or is your vehicle just sitting in your garage collecting dust? Your license, registration, insurance, and sales tax will normally be less with a used car vs. a new car.

With the country club, are you golfing every day or just a few days a week? There are a lot of public and semi-private courses available that could save you a ton of money and still allow you to play as often as you want. I have a good friend who is a superintendent at a golf course where I live. He told me very few people EVER get close to their money’s worth out of joining a country club.

What about travel and cruises? Cruises are now coming back full force and the cruise lines are offering some amazing deals. Maybe adjust when you go or take a few less expensive cruises or trips. As people get older, travel can become less desirable or maybe not even realistic due to health issues. These types of expenses typically become less and less as a person reaches their 80’s and beyond. By having these discussions, you can help people prioritize where they want to spend their money.

Covid-19 and its’ mutations will have to be dealt with, while more challenges like this are sure to come. Whatever lies ahead, there will be choices and options and opportunities for those that are willing to evaluate the situation and be open to making changes. So many people miss out on enjoying their later years due to the fear of retiring early and running out of money. As a planner, you have the power to help people put things in perspective and ease their fears so they can truly enjoy retirement.