More Americans are considering early retirement as a result of the COVID-19 pandemic, according to a new survey from wealth management company Personal Capital.
The survey indicated that nearly half of respondents (48.3%) would consider leaving the workforce before reach retirement age. Almost as many (45.4%), though, said that aren’t planning on an early retirement and others (6.3%) said that they were already planning on doing so before the pandemic.
If you are considering retiring early and tapping into your retirement benefits, it is important to ensure any debt you may have is paid off first. You can do so quickly by taking out a personal loan while interest rates are low to consolidate your high-interest debt. Visit Credible to find your personalized rate and see how much you could save.
Millions forced into early retirement
The onset of the COVID-19 pandemic allowed some older Americans to consider early retirement, as their spending habits became from frugal. Others, though, were simply forced into the decision, according to the survey.
Teresa Ghilarducci, a labor economist at The New School who specializes in retirement security and director of the institution’s Schwartz Center for Economic Policy Analysis, said in a March 2021 interview with AARP that millions of older workers "are going to be downwardly mobile from the comforts of middle-class life."
"People plan their retirement years and they look at their spreadsheets, she said. "They assume raises. They assume they will pay off their debts. Then this recession hits and they're forced out of the labor force, and all of those assumptions disappear at once."
If you plan on retiring but need a personal loan to meet expenses or pay down credit card debt beforehand, visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.
Can being frugal lead to financial freedom?
The path to becoming an early retiree may not always be easy when it comes to your finances. More than a quarter (26.6%) of the Personal Capital survey’s respondents said that they have difficulty sticking to a budget. Furthermore, 27.3% of Gen Xers and 27.7% of millennials said the same. Baby Boomers, though, appear to have had a slightly easier time with just 24.5% saying sticking to a budget is hard. Some benefits of adopting frugal habits can include increased time with family, work flexibility and the ability to travel.
"'Frugal' can mean something different for different people, but at the crux of it, cutting back on excess expenses and spending within your means is at the core of this concept," the survey stated. "Oftentimes, as our bank accounts, salaries, and net worth grow, our spending habits can grow with them. This is a phenomenon called ‘lifestyle creep,’ and it’s all too common. To avoid this, it’s important to stay on top of your finances, have a well-defined budget, and monitor your inflows and outflows."
If you are looking to get your finances back on track, consider consolidating payments through a personal loan, so you can begin building your retirement savings. Contact Credible to speak to a personal loan expert and get all of your questions answered.
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