US Population Rapidly Retiring
Posted on November 16th, 2022
Since the early 2010s, the percentage of the U.S. population made up of retirees grew at a fairly constant rate. However, this rate spiked at the start of the pandemic: and in the first year since the pandemic, an extra 1.3% of the population have retired, approximately 3.6 million more retirees.
For comparison, the average annual growth rate from 2010 to 2020 of retirees among the population was just 0.3% per year. The pandemic spike ended up adding more than 2 million extra retirees between 2020 and 2021.
The spike in retirees is largely seen as a result of the economic freeze caused by the pandemic and lockdowns. Many businesses either shut down or furloughed workers, driving millions out of the workforce. Once the economy began to recover, a significant proportion of workers let go during the pandemic have opted to remain in retirement, according to the Kansas City Fed.
The data indicates that, compared to before the pandemic, the rate of those going from employment-to-retirement and from retirement-to-unemployment have remained constant. However, the rate of those going from unemployment-to-retirement and from retirement-to-employment have dropped off. The takeaway is that the number of people retiring, as well as the number of people coming out of retirement remain the same as pre-pandemic. However, those deciding to come out of retirement seem to be finding it more difficult to find a job.
From February 2020 to June 2021, 0.7 million people under the age of 60 retired, 0.5 million between the ages of 61-67, and 1.6 million between the ages of 68-75. Many of these retirees are considered young enough to rejoin the workforce, and the easing of pandemic restrictions in the past year have created new opportunities. However, new and continuing economic issues including inflation and the war in Ukraine are dragging down the economy, and may make it more difficult to reverse the growing retirement trend.
Sources: Kansas City Fed, U.S. Census Bureau
