Considerations Before Joining the Great Resignation

As record numbers of workers jump to new jobs for better pay and benefits — leading to the term the Great Resignation — many older workers are quitting work altogether. This is called the Great Retirement.

Soaring investment portfolios in recent years and rising home values in most markets may be contributing to the jump in retirements, according to Pew Research Center. The center’s analysis found that 50.3% of workers ages 55 and older were retired in the third quarter of 2021, up from 48.1% in pre-pandemic 2019.

Retirement is on the minds of public service workers, too. A recent MissionSquare Research Institute survey of 1,100 state and local government workers found that 33% of them are considering retiring. Top reasons include burnout from job stress, wanting time to do things that bring them joy, and tension from dealing with the public.

Before you join the retiring crowd, make sure you can financially afford to do so.

For a discussion about retirement income, talk with your MissionSquare Retirement Plans Specialist.

Also, ask yourself some key questions:

Will your spending change in retirement? Some expenses will drop or even go away, such as commuting or saving for retirement. Other expenses, like travel or hobbies, may take their place. Creating a budget of your anticipated expenses in retirement will help you answer the next question.

Do you have enough savings? The answer will depend on your lifestyle, how long you’ll be retired, and the amount of guaranteed income you’ll have from Social Security, a pension or annuity.

Use the Retirement Security Builder to see whether your savings, as well as any pension and Social Security benefits, are enough to maintain your lifestyle in retirement. Before calling it quits, it’s a good idea to work with a financial advisor who can run the numbers for you and recommend an amount you can safely withdraw from savings annually without running out of money.

How will you manage health care coverage? If you leave the workforce before you’re age 65 and eligible for Medicare, you’ll need to bridge the insurance gap. And, if other family members are on your workplace health plan, what will they do for insurance?

Under COBRA, you or family members may be able to remain on your employer’s plan for a period (18 or 36 months, depending on your situation). This usually is expensive because you’ll be charged the full cost of insurance.

As an alternative, you might be able to be added to a partner’s workplace plan. Or, you can buy a policy on your state’s health care exchange (HealthCare.gov) or from an insurance company.

Is your debt under control? If you have high-interest credit card debt or other outstanding loans, you may not be able to comfortably keep up with the payments without a paycheck. Ideally, take steps to eliminate or substantially reduce debt before retiring, which will free up money for those retirement activities that bring you joy.

Log in to your account and check out the Financial Wellness Center for more financial tips and tools.