Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion for photography and spending time with her son and her grandkids.
The pandemic changed everything. Her son contracted COVID-19 in the early days of the pandemic. His health deteriorated quickly and he died at only 35 years old. He didn’t have life insurance. A gig worker without a 401(k), he had very minimal retirement savings.
Rose’s grandchildren, ages 2 and 6, joined the more than 140,000 U.S. children under the age of 18 who lost their primary or secondary caregiver due to the pandemic from April 2020 through June 2021. That’s approximately one out of every 450 children under age 18 in the United States.
Rose’s ex-daughter-in-law battles drug addiction and had lost custody of the kids during the divorce, so Rose became the children’s primary caregiver. She quickly discovered that caring for young children as an older adult is more physically challenging than when she raised her son, so she made the difficult decision to leave her part-time job to have the energy to care for her active grandchildren. She wants to do everything for these kids who have lost so much — but it puts her financial security at risk.
Sadly, she is far from alone.
The elderly continue to suffer the highest COVID death rates, but the death rate for younger people has disproportionally increased. The death rate for 74- to 84-year-olds increased 16% due to the pandemic. For 35- to 45-year-olds, it jumped 24.5%, according to the Centers for Disease Control and Prevention. Other age groups had similar increases.
Scott Davison, CEO of insurer and retirement company OneAmerica, says that among working people — those 18 to 64 years old — death rates are up 40%. “Just to give you an idea of how bad that is, a three sigma or 200-year catastrophe would be a 10% increase over pre-pandemic levels,” Davison says. “Forty percent is just unheard of.”
From grandparents now raising grandchildren to beneficiaries suddenly having to manage an unexpected inheritance, to the loss of a family wage earner, the pandemic’s financial reverberations can last generations.
An Inheritance Too Soon
Susan and her husband have faced their fair share of financial difficulties, including suffocating credit card debt and a foreclosure on their home. When Susan’s mother died from COVID, she received a $450,000 inheritance. Susan went from living paycheck to paycheck to having a financial safety net.
Susan is also paralyzed by guilt. She has immediate financial needs, but is emotionally unable to act, unsure how her mother would want her to use the …….