The final tally isn’t in, but all evidence indicates that baby boomer retirements have soared in the last 15 or 16 months.
Some of this was inevitable. People born in the peak years of the baby boom have been turning 65 years old for several years.
But there is little doubt that the pandemic accelerated the trend of many people, not just boomers, leaving the workforce. Perhaps the biggest question for the U.S. economy is how many of these workers will return to the labor force.
Given the dislocations in the economy, it remains to be seen how easily workers unemployed during the pandemic can reconnect with former or prospective employers. Industries from retailing to home-building suppliers are among the many finding it difficult to recruit workers.
In the financial services industry, a number of giant concerns are offering generous buyout packages, some including health insurance coverage for workers over 55 until they become eligible for Medicare. Many of these folks were born at the tail end of the baby boom and could well decide to return to work at some point before they reach 65.
A November report from Pew Research Center found that 3.2 million more boomers were retired in September 2020 than at the same point in 2019. For the prior four years, boomer retirements had averaged just under 2 million annually.
As America reopens after a pandemic that altered most people’s lives in ways few could imagine, some people will be happy just to return to normal. Others likely will seek to make major changes in their lives and, given the demographic position many developed nations find themselves in, retirement is going to be an obvious option.
Soaring financial markets are only increasing workers’ flexibility in lifestyle choices. This confluence of factors helps explain why 2020 was the best year in history for many advisory firms. And so far, 2021 is continuing along the same path.
People who work with advisors might have more options, but it’s still not that easy to make decisions about retirement in confusing times. That’s one reason Financial Advisor magazine last year formed Next Chapter with the Money Management Institute and the Execution Project. We’re holding a virtual event June 16-17 to explore these issues in detail and we hope you’ll attend. Find out more at fa-mag.com/nextchapter.
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