For Mona Janochoski, a chemist who ran a laboratory at 3M in St. Paul, Minnesota, working from home during the pandemic was the deciding factor.
It was the first time in her career that she had not gone to an office every day. And she found that she enjoyed being home with her husband, Tom, who had retired as the CFO of a trust company in 2017. Her daughter, who was a graduate student, was living with them, too. That got Janochoski thinking about something she had not given much thought to before: quitting her job after 36 years and seeing what else life had in store.
“When I was home during COVID, my husband really liked it,” Janochoski, 60, said. “He got used to the idea of me retiring. We kept going back to the adviser to make sure we could retire.”
The pandemic forced many people into early, unplanned retirements, when they were laid off or their business could no longer survive. But many of those people were not high earners. Retirements in the pandemic by those at the top of the income ladder were often by choice.
And for that slice of corporate employees, working from home for some or all of the pandemic scrambled their thinking on work and life. They had been working for decades in an office, and suddenly at home with a spouse, they began to see the possibility of a different life.
“The vast majority of our clients have at least inquired about what their plan would look like if they retired earlier,” said Mike Leverty, founder of Leverty Financial Group, whose clients include a lot of executives at large Minnesota companies like 3M and Target. “We haven’t seen people want to delay retirement. They’re getting a flavor of what retirement will look like in working from home.”
“Previously,” he added, “people wanted to max out the economic package with various pension and long-term incentive plans. In the last year, we’ve been asked to redo a lot of plans, and people are OK if they’re leaving something on the table.”
Deciding to retire early is about more than crunching the numbers, of course. It is also about psychologically preparing yourself to leave work and leave behind some part of your identity.
“You need a discipline to work from home and not go into the office,” said Rainer Zitelmann, author of “The Wealth Elite” and “The Rich in Public Opinion.” “No one is watching you. In the pandemic, people started thinking about what else they wanted to do.”
In Janochoski’s case, “retirement looked good” after all those months of working from home, she said. “I wasn’t going to go before April, when my stock options vested,” she added. “So I picked the end of May, and we ran through the numbers. It made sense.”
Jesse Coffee, a wealth adviser at True Private Wealth Advisers, said that before the pandemic, it was generally clients around age 62 who were initiating preretirement talks with him. In the past year, that age has dropped to 54 or 55, he said.
“People have realized what’s really important,” he said. “If you want to just go out and hike, it doesn’t cost a lot of money. If my lifestyle isn’t going to need all that much money, maybe I can move somewhere less expensive, have some low-cost hobbies and retire early. That and, frankly, the market has been great over the past 10 years.”
An adviser’s job is, of course, to do the math on whether retirement is even possible and what it may look like. But leaving a career, particularly for people who have risen up at a company doing work they enjoy, is not an easy decision to make. Working from home in the pandemic gave some people a taste of what retirement could be like, something they would not have gotten if they had kept going into the office or traveling for work.
“It’s allowed them to reset and take a step back,” Leverty said.
He said there was no question that retiring early would reduce wealth, but that is a trade-off for what could be more time — to spend with family, explore activities like charitable work or pursue new interests.
A life-altering event four years ago got Mark Nagel thinking about retiring as soon as possible. When he slipped on ice and pulled a muscle, what seemed like a minor injury would result in the amputation of one of his legs.
“Early retirement became a requirement at that point,” said Nagel, 55. “You just never know when something is going to happen. So why wait until next year?
He worked for 31 years at Ecolab, the water and hygiene company, and said he had always told himself that when the stock topped $200 a share, he would have enough to retire.
“The pandemic hits, we had already hit the $200-a-share mark, but now the bottom is dropping out,” he said. “There were a few weeks when I said maybe this is not going to be the time. Or maybe this new lifestyle of 100% working where I want to work is not so bad.
“At the same time,” he added, “we had this goal and this plan. We knew what we had to do. As the stock started climbing, we decided to stick with the plan.”
Nagel’s wife, Tammy, who will turn 55 this year, plans to work a few more years at Boston Scientific, he said.
Coffee, the wealth adviser, said that for him, “it comes down to what you’re spending, especially in retirement, when you don’t have the big paychecks coming in.” People with large incomes are “used to being able to spend money on whatever they want,” he said. “They’re taking the trips without thinking about the cost. In retirement, you have to put some thought behind it.”
Craig DiLorenzo, who worked in international positions for 3M for 35 years, said that after the pandemic erased the barriers between work and personal life, he began thinking about retiring.
“When you don’t go into the office anymore, you don’t own your time,” DiLorenzo said. “Most people head into the office at 7 a.m. or 8 a.m. and go home around 5 p.m. or 6 p.m. You lose that when everyone is working from home. You decide to meet at 6 a.m. because you have all these other meetings. Or it’s, ‘Let’s have a Zoom call at 8 p.m. because we’re all free.’ You lose your personal time somewhat.”
While DiLorenzo, 58, said he had always wanted to retire early, the loss of personal time at home coupled with losing the camaraderie that he had enjoyed in the office sped up his decision. He retired in April.
“When you don’t need to work anymore and you’ve lost that camaraderie, you start to think, ‘I can do something else,’” he said. “My wife said go for it. I had spent 25 years of my career in our international division, so I was always traveling, often for two to three weeks at a time, or on the phone at odd hours when I wasn’t traveling.”
The timing of Janochoski’s retirement was particularly good this year. Her youngest child, a daughter, just finished graduate school; one son is getting married; and her other son and his wife are expecting a baby.
“I could have kept working from home, but I had a good run,” she said. “With everything going on with the kids and the baby coming, and we’re financially OK, this was as good a time as any.”