Mon. Jan 24th, 2022

There were 3.3 million, or 7 percent, more retirees in the United States as of October 2021 compared to January 2020.

The increase in U.S. retirement during the Covid-19 pandemic was led by older white women without a college education, according to research by the St. Louis Federal Reserve.

The so-called Big Retirement trend that has caused workers to leave the labor market – whether forced or of their own choosing – has been driven by baby boomers aged 65 and older, the local Fed bank wrote in a recent blog post. In contrast, retirement among those between the ages of 54 and 65 min has changed.

Overall, there were 3.3 million, or 7%, more retirees from October 2021 than in January 2020, a number that exceeds the expected demographic shift of the large baby boomer cohort from the workforce.

Here are some of the other findings:

Who are the pandemic retirees?

  • Female workers were more likely to retire than men, especially among those over 65
  • White workers were more likely to retire than black, Hispanic, and Native American counterparts
  • Asian Americans were slightly more likely to retire than White workers of similar ages
  • Workers who were married or widowed were more likely to retire than their never-married, single partners
  • Workers with high school diplomas or less education were more likely to retire than peers with at least some college education
  • Veterans were more likely to retire than non-veterans, especially among those between the ages of 65 and 74

Away to retirement

Americans retired early during the Covid crisis for many reasons, including because they lost their jobs, feared for their health, or had to care for family members.

Another factor was the surge in the value of assets such as investments and real estate, which gave some Americans an opportunity to quit work earlier than they expected.

Average net worth rose by 12% and 14.8% among families with a household head of 55 to 69 and 70 and older, respectively, Fed researchers found.

Unlike in other developed countries, retirement is not necessarily a permanent shift in the US. It is not uncommon for Americans to “retire” and return to the labor market, out of financial hardship or personal choice.

The Covid retirement boom has changed that dynamic. Many retirees have not been pruned to return due to pandemic-related health risks, according to research by the Kansas City Fed.

“We find that the current increase is mainly driven by a decrease in the number of retirees rejoining the workforce,” Jun Nie and Shu-Kuei X Yang, economists at the local Fed bank, said in a report last year. writing.

“Even if monthly retirement-to-employment transitions return to their average pace in 2018–19, it will take more than two years to fully relax the recent increase in the retirement share,” they wrote last August.

Their analysis was done before the advent of the omicron variant, which has proven more contagious than previous waves and may further deter retirees from returning to the workforce.

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