There were 3.3 million or 7 percent more retirees in the United States as of October 2021 than in January 2020.
The increase in US retirements during the COVID-19 pandemic was led by older white women without a college education, according to research from the St. Louis Federal Reserve.
The regional Fed Bank wrote in a recent blog post that the so-called great retirement trend saw workers leave the labor market – whether forced or by choice – driven by baby boomers age 65 and older. In contrast, there was little change in the retirement age of people aged 54 to 65.
Overall, there were 3.3 million, or 7%, more retirees by October 2021 than in January 2020, a number that exceeds the expected demographic shift of the large baby-boomer cohort out of the labor force.
Here are some other findings:
Who are the pandemic retirees?
- Women employees were more likely than men to retire, especially women over the age of 65
- White workers were more likely to retire than black, Hispanic and Native American peers
- Asian Americans were slightly more likely to retire than white workers of the same age
- Married or widowed workers were more likely to retire than their unmarried, single peers
- Employees with a high-school diploma 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 those aged 65 to 74
road to retirement
Americans retired early during the COVID crisis for a variety of reasons, including because they lost their jobs, feared for their health or cared for family members.
Another factor was the boom in the value of assets such as investments and real estate, which caused some Americans to stop working earlier than they expected.
Fed researchers found that the average net worth in households aged 55 to 69 and those aged 70 and older jumped 12% and 14.8%, respectively.
Unlike other developed countries, retirement in the US is not necessarily a permanent change. It is not uncommon for Americans to “retire” and return to the job market out of financial hardship or personal choice.
The Covid retirement boom has changed that dynamic. According to research by the Kansas City Fed, many retirees are not motivated to return because of health risks related to the pandemic.
“We find that the current growth is primarily driven by a drop in the number of retirees joining the labor force,” regional Fed Bank economists Jun Ni and Shu-Kui X Yang wrote in a report last year.
He wrote last August, “Even if the monthly transition from retirement to employment returns at their average pace in 2018-19, it takes two years to fully untangle the recent increase in retirement share.” Will take longer.”
They were analyzed before the arrival of the Omicron version, which has proven to be more contagious than previous waves and could prevent retirees from returning to the workforce.