The coronavirus pandemic has caused financial hardship for millions of families, with more than 36 million Americans filing for unemployment benefits over the last two months. The stock market has also taken a hit, causing many soon-to-be retirees to wonder how COVID-19 will affect their retirement plans.

If you're nearing retirement age, you might need to be flexible with your plans for the future. It's uncertain just how long it will take for life to return to normal, and while some people may still be able to retire right on schedule amid the COVID-19 crisis, others may need to either postpone retirement or consider retiring early.

Older man looking at documents feeling confused

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The case for postponing retirement

There are several advantages to delaying retirement by a few years. First, it gives you more time to build a healthy nest egg. Just over 60% of Americans say the coronavirus pandemic has negatively affected their ability to save for the future, according to a survey from Country Financial, so if you're struggling to save right now, pushing retirement back by a year or two can make it easier to save more.

Another advantage of postponing retirement is that it will help you avoid withdrawing your savings during a recession. If you can help it, it's best to avoid selling your investments when stock prices are lower. When you've been investing for decades, withdrawing your savings in the middle of a market downturn is essentially buying high and then selling low. Because the market is so volatile right now, it may be a good idea to delay retirement by a couple of years so you can avoid tapping into your savings until the economy is in better shape.

Of course, many older adults may not want to continue working longer than they'd planned, so while delaying retirement may look good on paper, in practice it may be difficult to pull off. If you have health issues or other reasons to believe you won't be able to work longer, be sure to take that into consideration.

When it's best to retire early

Postponing retirement assumes you're fortunate enough to continue working for as long as you'd like, and not everyone has that luxury. Older adults are losing their jobs at an alarming rate, with the unemployment rate among Americans age 55 and older jumping from 3.3% in March to 13.6% in April, according to the Bureau of Labor Statistics.

If you lose your job due to COVID-19, you can either rely on your emergency fund for as long as possible while you look for another job, or you can retire early. You might qualify for unemployment benefits if you lose your job, but depending on what state you live in and how much you're eligible to collect, those benefits may not be enough to live on. If you can't survive on unemployment and you have little to no emergency savings, you may have no choice but to retire early.

In some cases, though, you might choose to retire early even if you don't have to. If you have a robust retirement fund, for example, you might be able to afford to retire now. You may also be able to start collecting Social Security benefits if you're at least 62 years old, which can provide additional income. Then if you change your mind down the road and want to start working again, that's still an option. Retirement isn't permanent, so even if you choose to retire early, that doesn't necessarily mean you'll never find another job later.

Which option is best for you?

Whether you decide to postpone retirement or retire early depends on your situation. If you still have a job and your savings have taken a hit over the last few months, delaying retirement to give yourself more time to prepare may be a wise move. In addition, when you're not withdrawing your investments during a recession, that can also help your money last longer.

On the other hand, if you lose your job and don't know when you'll be able to find another one, you might choose to simply retire earlier than you'd planned. If you have plenty of savings set aside, you may be able to enjoy retirement comfortably. Otherwise, you might choose to go back to work in a few years when jobs aren't so scarce to build a stronger retirement fund.

Whatever option you choose, make sure you've thought about the advantages and disadvantages so you know you're making the best decision for your situation.