The Long-Term Impact of COVID-19 on Retirement and Aging

November 19, 2020

News of the coronavirus vaccines moving closer to approval is fantastic.  Hopefully, in the next twelve months, COVID will be under control.  Even so, the pandemic’s impact will not be soon forgotten.  The virus has accelerated developments already under way and has permanently changed the way we look at retirement and aging. Here are some of the changes:

  • More people want to age at home rather than at a nursing home.

About 40% of U.S. Covid-19 related deaths occurred in long-term care facilities.  Furthermore, those in nursing homes became isolated.  Before the pandemic, 90% of residents had weekly visitors.  After it, only 28% allowed visitors.  Even spouses, living in the same facility, were separated for months.  In addition, after COVID hit, only 6% of those in nursing homes were allowed to leave the facility. There’s a demand for fewer but better nursing homes and more resources to help people age at home.

The trend toward more aging at home will also favor smaller eldercare arrangements.  Already 300 such homes in dozens of states house up to 12 residents each and typically feature open floorplans, large dining room tables, fireplaces and porches. Data shows that 94% or more of these facilities that were certified to provide skilled nursing care remained virus free through August 31.

There may also be a movement away from 55+ communities, where older people live in a community with all ages.  Hopefully, this might cause seniors to be viewed not as a problem to be solved, but rather as a resource of social, intellectual and community capital.

  • Older people will benefit from the technology boom.

The pandemic and the aging of the population is contributing to a wave of innovation aimed at all the older adults. Telemedicine is a great example.  In March, Medicare expanded reimbursement to doctors for virtual visits. Wearable devices and diagnostic tests for home use provide doctors with key information including the patient’s blood pressure and weight and allow better monitoring.

Other innovations are focused on dealing with isolation.  For example, virtual travel with guides is already available at Discover.Live.Inc.  Older adults can pair with children needing help with their homework with Eldera.  Seniors can connect and help foreign-born students wanting to practice English on Table Wisdom. Silvernest, Inc. pairs older homeowners with roommates who pay rent.

  • Lifespans will likely decline.

With so many people dying of Covid virus related deaths, it is expected that the aggregate life expectancy of Americans will drop from 65 today to 64.  In addition, the coronavirus is likely to reduce the life expectancies of those who survive it or avoid it.  In addition to the long-term physical damage some Covid survivors suffer, the pandemic is undermining our ability to engage in activities associated with better health and longer lives; including socializing, exercising and helping others.  Loneliness may contribute to greater risk of death, cognitive decline, depression and heart disease.

Technology will help overcome some of these problems and programs like Zoom are helpful but far from a perfect substitute for the human contact we social beings need.

  • We will do a better job of pursuing happiness in retirement.

Working from home can provide a sense for what retirement life might look.  Many retirees are frustrated that the virus is interrupting plans to travel and see grandchildren. But the COVID required break from routine has also freed up time to assess our plans, our values and the kind of legacies we want to leave. People are answering questions prompted by the coronavirus such as:

-What would you do if you had all the time and money in the world?

-How would you live if you knew you had only 5 to 10 years left?

-What would you regret most if you died tomorrow?

The virus has enhanced the feeling that life is short and that our life clock is ticking. People are taking time to plan what can make them happy.

  • We will work longer.

Since the 1990s the percentage of people 55 and older in the workforce has risen steadily to 40% in 2019 from 29% in 1993.  Work not only provides income -it can also allow individuals to connect with others, use their skills, help others and remain relevant.  There’s so much uncertainty about the future that most people are going to continue to work as long as they can. With companies embracing remote work and flexible hours in the gig economy expanding, it’s easier for many older people to remain employed.

  • We will focus on our biological age, not our chronological age.

The older you are, the greater your statistical odds are of dying from the coronavirus. But underlying health problems, including diabetes, heart conditions and obesity are also significant risk factors. Such conditions can be caused by factors beyond our control including genes, but diet and exercise also often play a huge role. The pandemic is helping raise awareness of the concept of biological age, or the internal pace of aging age, as the number one cause of risk for mortality from Covid.  It’s not chronological age-it’s biological age. As wearable monitoring devices become more prevalent, more of us will track measures of underlying health.  Medicine may likely assign patients biological age values to help them make better informed decisions.

  • We will plan better for death.

As we pointed out in our April 22, 2020 blog-, now is the perfect time to review your estate planning.  COVID-19 has shown all of us that life is fragile, precious and unpredictable.  Yet, working with your attorneys and your wealth managers you can plan, implement, monitor and revise your estate plan to prepare you and your family for the future.

Conclusion:  Even when the virus is finally under control, COVID-19 has really provided a huge wake-up call to all of us, particularly those in or planning for retirement.  Life is fragile, precious and unpredictable.  We all want happiness and we need to plan to make it happen.  There really are four legs of that stool- financial health, physical health, mental health and happiness health.  We need to take our time to put the plan together and then follow it.  No time like the present to get working on it!

Detterbeck Wealth Management is a fee-only financial planning / wealth management company with offices located in Palatine, IL (Chicago area) and Charleston, SC areas serving clients locally and across the country. To contact us about setting up an appointment, please see our contact us page