Many Pandemic Retirees Weren’t Ready. How to Cope if You’re One of Them.

Andrea Jones hadn’t yet settled on a date to retire from her customer service job at United Airlines when Newark airport started looking like a ghost town in March 2020. After 28 years with the carrier, she still loved her work. But by the end of that month, she had hung up her blue uniform for the last time. She is still struggling with a sense of loss.

“I wasn’t at all ready to leave,” she said. “It hit me right between the eyes.”

Ms. Jones, 68, of East Windsor, N.J., retired to protect the health of her husband, George, who has multiple myeloma, a form of cancer. Fortunately, the Joneses had a nest egg, and United offered a retirement package that enabled her to keep their health insurance.

Patricia Scott has not been so lucky. Ms. Scott, a special-education teacher in Stockton, Calif., retired in January to preserve her own health. A grandmother of 10, she survived breast cancer in 2016; her oncologist told her she couldn’t risk catching Covid-19 by returning to the classroom. Now, at age 66, she is on financial quicksand. “My income is half what it was,” she said. She is single and in debt. “I’m stressed, I’m depressed and I’m terrified.”

For many of the nearly three million workers ages 55 to 70 who have left their jobs since March 2020, retiring during the pandemic has inflicted two traumas. Like Ms. Jones and Ms. Scott, most felt they were forced out of work before they wanted to go, said Teresa Ghilarducci, a professor of economics and policy analysis at the New School for Social Research. Among that subset, the majority, like Ms. Scott, were financially unprepared, Ms. Ghilarducci said.

According to research from the New School, far more older workers retired during the pandemic than during other recessions. After the 2008 financial crisis, for example, 1.9 million older workers left the labor force in the first three months of the recession. In the first three months of the pandemic last year, 2.9 million left the work force. The latest data shows that 1.7 million of the newer wave of retirees left despite financial uncertainty, Ms. Ghilarducci said.

Their departures generally were not a bid for a few extra years of bird-watching. “A lot of people were pushed out of their jobs,” Ms. Ghilarducci said; she attributed that push partly to age discrimination. “It used to be that employers would let the ones they just hired go first in a recession, but this time older people who have been in their jobs the longest have been hit hardest.”

Lack of enforcement of anti-discrimination laws was a factor, she said. So was what some employers saw as a rare opportunity created by the pandemic to get rid of older workers, who are perceived to be less productive and more expensive.

Regardless of the reason, the new army of reluctant retirees, disproportionately made up of Black workers and those who lack a college degree, according to June data from the New School, is in trouble. One key reason: Debt rates among Americans 65 and older are the highest they’ve ever been, Ms. Ghilarducci said. And they are likely to rise as more people are forced to draw down their assets to make ends meet. Collecting Social Security earlier than anticipated will add to their vulnerability, since claiming earlier will permanently reduce their benefits.

Even for people with a financial safety net, the hurdles can be significant. “There’s a lot of stress that comes with having retirement forced on you,” said Malcolm Ethridge, a financial adviser in Washington who has several newly out-of-work older clients. “It takes time to get past the disruption.”

For some, Mr. Ethridge has found, a part-time job can return a sense of equilibrium. For others, the road ahead isn’t as bleak as it seemed. “A lot of people have this ambition that they’re going to retire at a certain age, with a certain amount of money, but they have no idea they might be able to adjust those goals.” One of his clients, pushed out of a software engineering job at Verizon after 27 years, was surprised to learn that he could have retired comfortably two years ago.

Clients who suddenly have time on their hands sometimes risk too much of their savings for Mr. Ethridge’s liking, particularly as first-time entrepreneurs. He said he was seeing more entrepreneurs of color starting businesses since the pandemic began. “It’s important that they’re taking steps to own their future, but some are spending down their retirement to get started,” he said. “They need to make sure money is still going into the retirement bucket.”

Adding to retirement savings after a job loss most likely won’t be possible for the nearly 20 percent of low-income workers over 50 who felt they had no choice but to retire, Ms. Ghilarducci said: “They’ll have only Social Security to rely on, and they’ll be poor.” Ms. Scott, the teacher, was not in that category because she has a pension, but topping up the retirement bucket is a long shot for her, too.

Though the early retirement incentive package she accepted from her school district in January has kept her afloat, a $426 monthly student loan payment she deferred will catch up to her in January. “I think of that number, $426, at least five times every day,” she said. When she resumes payments, she will no longer be able to afford her rent. “I don’t know what I’m going to do. I’m going to have to move in with a relative and be a burden.”

Jovan Johnson, a certified financial planner in Atlanta, said Ms. Scott and others in her situation should start looking for a pro bono financial adviser who can help make sense of their money. “There are a lot of us out there who will help people out for free during a crisis,” he said. He recommends searching sites like the XY Planning Network.

The primary benefit of sitting down with a professional may be relief from panic, he said. But the 15 new retirees who have contacted him for pro bono help since the pandemic started, among them nurses and teachers, have also gained a better understanding of how to manage limited funds. “Everybody deserves to have a plan,” he said.

Getting a grip on money is one way to take control. Handling the emotional fallout may not be as easy. Ms. Scott’s loss of identity as a teacher, she said, was as much to blame for her depression as the financial pressure. “I got to spend six hours a day, five days a week with kids that needed me badly, and to be honest, I was great at it,” she said. “Leaving them in the middle of a school year felt like losing my own children.”

For Janice Sands, 71, who retired in March from the Manhattan arts organization Pen and Brush after 23 years as executive director, the stress started last year, when she contracted Covid-19 and spent several weeks in an intensive care unit. She was not psychologically ready to retire, but because she has still not fully recovered, she felt she had to. “I was one of those people who was going to have to be wheeled out of there, I loved it so much,” she said.

Now she is adjusting to what she said was a more limited routine. Sunday nights and Mondays flummox her the most. “It’s like when you have that dream where you have a final exam and you’ve never been to class, or you forget your locker combination. I keep thinking, I have to go to work.” Instead, she takes walks with her husband, Wallace Munro, a retired actor, and visits the grocery store more than she thought she would ever want to.

“It’s something to do,” she said. “You have to restructure your life when something like this happens to you. It’s so easy to get depressed.”

Managing money in a sudden retirement

Mr. Johnson, the financial planner, offered tips on juggling your income and expenses when you’re thrust into joblessness with little warning.

• Make sure that you do not have any old pension or 401(k) money out there from previous employers. People who have rolled over retirement accounts from previous employers often forget about them.

• Don’t feel guilty for taking Social Security early — especially if you have no other option. You can begin claiming your benefits as early as age 62. However, the downside to claiming before your full retirement age (you can look it up on the Social Security website) is that your total monthly payments will be permanently reduced. If your income is below a certain threshold, your full Social Security payments might be tax-free.

• Use Social Security payments for your nondiscretionary, fixed expenses and retirement assets for discretionary expenses, such as travel and entertainment.

• Bridge the gap to Medicare, because the age of eligibility is 65. Consider plans under the Affordable Care Act. Typically, if your income is low enough, you may receive premium tax credits and other benefits if you choose a plan on the marketplace.

• If Social Security and retirement savings cannot sustain your lifestyle, it’s time to consider Medicaid, Supplemental Security Income and similar programs.