COVID-19 is changing life for millions of Americans -- and for many of them, one of the big changes may relate to how long they remain in the workforce. In fact, recent research from Edward Jones found that as many as 68 million Americans may end up reconsidering the timing of their retirement due to the coronavirus. This includes 10% of Americans who say they will retire earlier than planned and 29% who indicate they'll be retiring later. 

It's not surprising that you may have to change your date of departure from your job based on a virus that has upended much of public life. Instead, it's more surprising that as many as 61% of Americans indicate COVID-19 hasn't affected their retirement plans. In fact, some among that majority whose plans remain unchanged may actually want to think about whether altering their retirement date could be a smart move. 

Calendar with date circled and reading "Time to Retire"

Image source: Getty Images.

Should COVID-19 change your retirement plans? 

Retiring earlier in response to COVID-19 could make sense for you if you're 100% sure you're financially ready to do so and you no longer feel safe working due to the virus. If you've lost your job and can't find a new one or don't want to, then you may also opt to retire earlier than planned -- although, in that case, you should make sure to take advantage of unemployment benefits first before claiming Social Security or beginning to rely on your retirement investment accounts. 

For many people, however, the virus won't mean that retiring earlier makes sense -- instead, it will necessitate retiring later than originally anticipated. And this may be a smart move for you if:

  • Your retirement accounts sustained losses in March's coronavirus market crash and you haven't fully recovered from them despite the rally that followed. In this case, working longer could give you more time to save money to bulk your accounts back up. Otherwise, with a lower account balance, you may need to take out less money to maintain a safe withdrawal rate that ensures your accounts don't run dry too soon. 
  • You're close to retirement with little or no liquid cash. The coronavirus crisis and resulting recession is an important reminder of the need to have several years of living expenses accessible in a savings account before retirement so you don't have to sell your investments during a market downturn in order to provide for living expenses. 
  • You need to pause contributions to your retirement accounts due to an income cut or job loss and this makes it impossible to hit your savings goals on target.
  • You experience a period of extended unemployment or low wages due to the virus. This can affect your Social Security benefits, as the size of your check is based on average wages in the 35 years you earned the most. If you miss out on years of earnings or experience low earnings during your career because of COVID-19, you may need to work longer to replace some of those low-earning years with high ones or to make sure you get your full 35 years in to avoid having $0 wage years included in your average.

If any of these apply to you, putting in some extra time on the job could help ensure that the virus doesn't leave you with less income throughout the course of your later years. 

Think about the big picture when deciding when to retire

Before you decide when to retire, it's important to look at how your decision will affect your Social Security, the size of your nest egg, and a safe withdrawal rate. You may find that COVID-19 hasn't changed anything about your situation so you can retire as planned, but you may discover that the virus has made pushing back your retirement date a smart idea.

Being flexible, looking at the big picture, and making sure your finances are in good shape is always essential before leaving the working world for good, so be aware that while you may desire to retire at a certain date, life may very well have other plans.