Why More Professionals in the University and Medical Fields Are Retiring Now More Than Ever
They’re calling it the Great Resignation. This unprecedented phenomenon is observing numerous Americans leave their jobs—some for greener pastures, others for extended periods, and still others, especially older Americans, for retirement. While endless column inches on this matter have been published, one of the big questions is why it’s happening here and now.
The most natural answer is that this is an appropriate response in the wake of the COVID-19 pandemic. It’s difficult to find anyone or anything that hasn’t been affected by the pandemic, especially those clients we work with in the medical and education fields, where the stresses of the pandemic are front and center and have created a new working environment unlike they've ever seen. While some people are choosing to stay home because they aren’t interested in risking illness to go into work, the full picture is a bit more complex, especially for those with jobs where remote work isn’t an option. But there’s another factor at play here. It’s been a long time coming but hasn’t been talked about much because of other more pressing world events.
The Baby Boom Meets the Retirement Boom
These last few years have been a bit different than they were in the past. Reaching retirement age now doesn’t mean exiting the workforce completely. Many retirees start businesses, shift to part-time work, or change their focus from their jobs to working for charities or nonprofit organizations. In 2008, the oldest baby boomers reached age 62. This coincided with the so-called “Great Recession,” when the economy declined and perhaps represented a less-than-advantageous time to start retirement. Many people decided to hold off on retiring and wait a few years. In 2021, the economy had distanced itself from those events and faced new developments. Just over half of adults aged 55 or older had exited the workforce and retired. For adult Americans aged 65 to 74, the percentage who had left the workforce was 66.9%, just over two-thirds of this population.1
Catching Up
So, rather than seeing everyone head to the door simultaneously, what we’re seeing is a bit of a “catch-up” period. We are looking at a picture of what might have been if the Great Recession had gone a bit differently. The pandemic created a transition period in which people decided that it was a natural time to work less, transition to new things, or retire completely. The pandemic has gone on way longer than any of us could have imagined, with the more potent Delta variant making way for the more contagious Omicron variant. Examining this context makes it easier to see why someone reaching the end of a long and rewarding career might choose to exit the pattern of working during COVID-19 and parachute into a less stressful, more enjoyable paradigm.
Is It Your Time, Too?
You might be thinking that this period of mass retirement presents you with an opportunity to cast off the yoke and ease into retirement. Despite the large numbers of people making this big transition, it is important to remember that moving with the crowd isn’t always a justified action.
It’s also possible that now is a great time to transition into a different opportunity for your last few years of work. Maybe you have a business idea you’ve been working on. Now may be a great time to put it into action. Or perhaps you want to transition into a new role at work or change careers entirely into a less demanding position for a few more years until you finally transition into retirement. These may also be great ideas depending on your circumstances.
If you think now is the time, your first step is to set up some time to talk with your friendly financial representative. They can look at your overall financial strategy to give you a better overview of where you stand and the drawbacks and advantages of retiring in the current environment. Going through the Life Planning process can also bring some clarity for those unsure of what their next steps should be. Discovering or clarifying your purpose and sketching out what your ideal life should look like can help in the decision making process, with the ultimate goal of bringing more meaning and joy into your life, whether that’s continuing to work or deciding its your time to retire.
Jeff Spitzmiller is the CEO of Ohana Wealth & Life Planning based in Cincinnati, OH. Ohana specializes in life and financial planning along with ESG (Environmental, Social, Governance) investing principles for professionals in the healthcare and university fields. The firm is an independent financial advisor and a fee-only fiduciary. Jeff and the firm also enjoy volunteering and giving back to the local community. You can reach Jeff at jeff@ohanaplanning.com.
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