Fast-Tracking Retirement

COVID-19 prompted some of this advisor’s clients to consider retiring sooner; she showed them they could.

By Jerilyn Klein

Many Americans at or near retirement age who’ve lost jobs or have had to permanently shutter small businesses during the pandemic will struggle to pick up the pieces at this stage of their lives. They’re running out of time, they’re facing ageism, and they’re also more vulnerable than younger workers are to becoming sick or disabled from COVID-19 and other ailments.

But the pandemic — which has exacerbated many inequities — hasn’t sucker punched higher-earning older workers as intensely as their lower-income peers, who were more likely to be employed in the hardest hit sectors, including transportation, hospitality and manufacturing.

Individuals who are still working are more likely to have white collar jobs, and many of them have been able to work remotely over the past year, says Lynn Ballou, CFP, a partner with EP Wealth Advisors in the Northern California East Bay Area.

“I don’t have any tales of devastation,” Ballou tells me. “What I do have are tales of people rethinking the fact that they don’t have opportunities and that they really are now retired, or they may not be able to find jobs when they thought they wanted to.” Some clients are also rethinking, she says, “Do I want to wait till age 70 for retirement from Social Security and do I trust the government not to change all the numbers?”

Another thing she is seeing is people who are waking up and saying, “Oh my stars, I’m in my 50s, my 60s, my 70s — how much healthy lifetime do I actually have left, and what the heck do I want to be doing with that time, because that time is an asset, it’s a gift, it’s a treasure,” she says, “and if I can afford to not work and I wasn’t loving what I was doing, maybe I just stopped working.”

Ballou says her clients who’ve made an earlier-than-expected exit from the workforce “have felt that getting rid of all the stress and overhead from working, wardrobes, commuting, time lost to endless meetings, etcetera, was a great trade off for less income.” But she is helping ensure that ditching their jobs isn’t a knee-jerk reaction.

“We’ve run updates to many client plans illustrating if they can afford to walk away and not work again, so that if that’s a choice they make, the potential consequences are understood,” she says. “Because of the surprising strength of the stock market during the last half of 2020, many of these plans looked far better than one would have guessed would happen during a global pandemic.”

As a result, clients are more frequently locking in market gains and moving significant assets to fixed income despite the very low interest rates they will earn there, she says.

“For those making the move to step away from work or not return to looking for work, if that choice was made for them, stockpiling cash and high quality fixed-income holdings has been a frequent move,” she says.

Ballou is also glad that more clients are finally paying attention to something she has been emphasizing for a long time: that they can easily cut 10% from their spending.

“We can live on less! I’ve said it for years, and guess what — I’m right!” she says. “I’ve even had clients tell me that they are shocked by how little they really need to buy to create a comfortable lifestyle.” Some are keeping their cars longer. Others are downsizing homes sooner than they had originally planned.

Every six months, Ballou shares her screen with her clients, pulls up their financial plans and asks them how their budgets have changed. A number of them have repurposed their travel budgets during the pandemic. “When you’re home 24/7 you’re looking at that deck like, ‘I need a deck, and I’m not going on a Viking cruise this summer so maybe I should use that money to do the deck,’” she says.

She helps make sure that any decisions they’ve made or plan to make about work will still be affordable. “Of course, working with a high-net-worth, highly educated clientele versus those who have been working three jobs just to put food on the table and pay rent is a very important distinction,” she says — something she always keeps in mind.

Revising Plans

A number of Ballou’s clients who thought they’d wait until 70 to start collecting Social Security instead decided to apply at their full retirement age, although it means they’ll ultimately receive less. COVID-19 prompted some of this advisor’s clients to consider retiring sooner; she showed them they could. “For a married couple, bringing in a few thousand extra dollars after Medicare and federal tax is plenty to keep the lights on and provide peace of mind,” she says.

One client told her, “Why would I wait until 70 to get more income knowing that the biggest amount of that income is going to come when I’m in my 90s and I won’t care? I’d rather get it now so I can have fun and do something with it,” she says. She has seen more and more people adopt this mindset since the pandemic began, she said, and expects them to spend a lot on vacations once they’re vaccinated and travel restrictions are lifted.

Ballou says she tells her clients, “One of the tricks about Social Security and tapping into it a little bit early — I wouldn’t suggest anything like age 62, unless there’s a family crisis — is that it helps you preserve your other assets while sanity returns to the markets.” She also helps them select investment holdings that’ll rebound in good markets and not just disappear.

Being in lockdown has prompted some clients to sell their homes in the San Francisco Bay Area where housing is expensive, taxes are very high, and their children or other relatives may no longer reside. By moving to less expensive locations — she’s had clients go to Nevada, Texas and Washington State — they’re freeing up capital, pocketing cash, lowering their future monthly living expenses and thereby extending the life of their [investment] portfolios, she says.

One client couple that had been putting off moving for a very long time finally said during the pandemic, “Why are we rambling around in this four-bedroom house? It’s just the two of us,” she says.  With families fleeing the city during the pandemic and wanting a yard for the kids, her clients’ house, like many others, sold for much more than anticipated, she adds.

Aging clients are also accelerating home sales to move into retirement communities, especially those that offer continuing-care opportunities that include full memory and nursing care, she says.  Some are buying in while many others are finding places where there is only a monthly fee.

Although she hasn’t see this yet in her practice, she thinks other homeowners may decide it’s time to put reverse mortgages in place so they can tap into the equity if they want to age in place rather than selling their homes.

“I’ve also chatted with clients about not stressing now about losing their jobs and instead tapping into investments to the extent they must, knowing that when the economy hits the restart button they can look for employment again at that time,” she says. “For a lot of clients, that can mean a simple part-time job and not re-entering the work force in full career-planning mode.”

Ballou is impressed by the resiliency she is seeing. Clients who have lost jobs have created new ones. “Some are tutoring online because not all parents can actually help their kids with Spanish 3 and Physics!” she says. Others are leading yoga and exercises classes, and teaching guitar and languages to adults who are looking for something new to do. One client is teaching art online to adults.

“I think in a few years we’ll see some amazing new tech developments incubated directly because bright-minded people with time on their hands came up with great ideas,” she says. “Look out Shark Tank!”

“I think one benefit of the pandemic has been the opportunity to stop rushing around and learning to reconnect to life, family and plain old-fashioned breathing.”

Finally, “I think one benefit of the pandemic has been the opportunity to stop rushing around and learning to reconnect to life, family and plain old-fashioned breathing!” says Ballou.  “Take a breath, take a beat. Not the worst outcome.”

Jerilyn Klein is editorial director of Rethinking65. How are you helping clients continue to cope with pandemic-related challenges? Email Jerilyn at

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