America’s ‘Great Retirement’ Led by Older Female Baby Boomers | Coronavirus Pandemic News

As of October 2021, the number of retirees in the US increased by 3.3 million, or 7%, compared to January 2020.

A surge in U.S. retirements during the Covid-19 pandemic has been led by older white women with no college education, according to research from the Federal Reserve Bank of St. Louis.

The regional Fed wrote in a recent blog post that the so-called Great Retirement trend that sees workers out of the labor force — whether forced or voluntary — is being driven by baby boomers 65 and older. In contrast, retirement for the 54- to 65-year-old group has barely changed.

Overall, as of October 2021, retirees increased by 3.3 million, or 7%, compared to January 2020, a figure that exceeds the expected demographic shift as the baby boomers exit the labor force in large numbers.

Here are some other findings:

Who are the retirees in the pandemic?

  • Female employees are more likely than men to retire, especially among those over 65
  • White workers more likely to retire than black, Hispanic and Native American peers
  • Asian Americans slightly more likely to retire than white workers of the same age
  • Married or widowed workers more likely to retire than unmarried single peers
  • Workers with a high school diploma or less education are more likely to retire than their peers with at least some college education
  • Veterans are more likely to retire than non-veterans, especially among 65- to 74-year-olds

road to retirement

During the Covid crisis, Americans retire early for many reasons, including because they lost their jobs, worried about their health or had to care for their families.

Another factor is a boom in the value of assets such as investments and real estate, which has given some Americans the chance to stop working sooner than they expected.

Fed researchers found that the average net worth of households headed by households aged 55 to 69 and 70 and older rose by 12% and 14.8%, respectively.

Unlike other developed countries, retirement is not necessarily a permanent shift in the U.S. It is not uncommon for Americans to “not retire” and return to the job market due to financial hardship or personal choice.

The Covid retirement boom has changed that dynamic. Many retirees have not been impacted returning due to health risks associated with the pandemic, according to Kansas City Fed research.

“We found that the current increase is largely due to a reduction in the number of retirees rejoining the labor market,” regional Fed economists Jun Nie and Shugui Yang wrote in a report last year.

“Even if the monthly transition from retirement to employment returns to the average pace of 2018-19, it will take more than two years to fully moderate the recent increase in the retirement share,” they wrote last August.

Their analysis predates the emergence of the omicron variant, which has proven to be more contagious than previous waves and could further deter retirees from returning to work.