It’s all over the news — what’s being touted as “the Great Resignation,” consisting of a high number of workers who, likely triggered by the pandemic and what it uncovered in work life and life in general, have decided to move on from their current jobs to greener pastures.
People have been leaving their employers since the dawn of time, but the rate at which people are resigning now has been making headlines. While just about every demographic is represented in some way, it’s by and large younger workers who are leaving their jobs during this exodus.1
So, what about older workers? You won’t find quite the same numbers of people from that demographic partaking in the Great Resignation. What’s different, and why aren’t they leaving in droves like their younger counterparts? Here, we explore some of the stats and how advisors can approach the topic with their older clients.
Why are People Leaving Their Jobs?
A recent survey found three primary reasons people have been resigning: low pay, lack of career advancement opportunities and feeling disrespected.1 Child care issues played a role in many cases as well.1
The survey also discovered that younger adults and those with lower incomes were more likely to leave their jobs in 2021.1 With younger adults often having lower-paying or entry-level jobs in general, some of which may not be the most worker-friendly, it makes sense that younger people may be more likely to hit the road for something different.
The Difference for Older Workers
When a runner is close to the finish line, will they want to call it quits and start the race over? Older workers nearing retirement could find themselves losing out on many financial benefits and giving up what security they have by walking out the door and starting anew somewhere else, whether they’re unhappy with their current role or not.
It appears some older workers are delaying leaving the workforce altogether, thanks in large part to the uncertainties brought about by the pandemic. Another recent survey found that a quarter of participants ages 45 and older said the pandemic has made them delay retirement plans, with that number increasing to 30 percent for respondents ages 65 and older.2
Close to half of those surveyed noted fears of market volatility and outliving their income in these turbulent times.2
Yet another survey, conducted by AARP, found that some Americans over age 50 who are nearing retirement have actually considered ducking out into early retirement or already have done so because of the pandemic — to the tune of about two in five surveyed.3
It’s clear there is more than one way older workers are thinking about the Great Resignation, and individual factors are likely playing a major role in the decision.
How Advisors Can Talk to Older Workers About Retirement in Today’s Climate
While these surveys provide valuable insights into the behaviors of older Americans in the workforce, each person has unique circumstances that you should consider if they come to you to discuss their financial options and how they can move forward in uncertain times.
Some questions to ask those clients include:
- Is your job causing undue stress?
- How close are you to retirement age?
- Which accounts can you count on for income during retirement?
- Do you plan to take Social Security early, at retirement, or delay it?
- Can you realistically live without the income you currently make from your employer?
When it comes to deeper questions about their working conditions and their mental health, you’ll likely need to defer to someone with expertise in the mental health field to meet their counseling needs appropriately, and that’s okay.
Financially speaking, your clients could fall into the camp of delaying retirement to build up a bigger reservoir of income for those twilight years, or they could be close enough to retirement age and already financially prepared such that early retirement could be a viable option.
The important thing is to discuss every option with them and to make sure they comprehend where they stand financially one way or the other.
Resources to Help Clients Navigate Emotionally Charged Retirement Decisions
With ongoing uncertainty about markets and the pandemic, many of your clients who are nearing retirement may be experiencing stress about what to do next. Under such duress, it’s easy for a person to make a misguided or impulsive decision. That’s why we want to help you help them.
We’ve gathered ample resources for providing behavioral finance advice to your clients. Learn about and understand the emotions, values and impulses that steer an investor, and help guide them to a financial solution that can work in their favor. Click the link below and begin exploring these tools today.
1Pew Research Center, Majority of workers who quit a job in 2021 cite low pay, no opportunities for advancement, feeling disrespected, March 9, 2022
2Nationwide Retirement Institute, New study: for many older employees, there isn’t a Great Resignation, it’s the Great Delay, November 8, 2021
3AARP, Understanding the Great Resignation and Impact of COVID-19 on Work for the 50+, January 2022