- The rush to retire during the pandemic still shows little sign of slowing
- But the tightening job market has employers trying to lure them back.
A wave of retirements has hit the United States, leaving businesses scrambling to fill positions and a growing number of Americans taking advantage of the time out of work.
There are about 2 million more people who have retired than official forecasts.
The percentage of the adult population retired has increased from 15% in 2007 to just under 20%, a sharp acceleration since 2020 and defying forecasts from the St. Louis Federal Reserve.
“Although the gap appeared to be narrowing at the start of the year, it appears to have widened slightly since then,” said Miguel Faria-e-Castro of the Federal Reserve Bank of St. Louis. Bloomberg.
“As of September, we estimate there were approximately 1.98 million surplus retirees.”
There are about 2 million more people who have retired than official forecasts.
The percentage of the adult population retired increased from 15 percent in 2007 to just under 20 percent, according to a study by the Federal Reserve Bank of St. Louis.
According to the Bureau of Labor Statistics, the average retiree earns a pretax income of $55,335 and spends about $52,141 per year. But 75% of this spending is dedicated to four key areas
Half of the wealth in the United States is now held by people born before 1965, a study found this summer, helped by decades of rising housing prices and falling relative wages for young people.
But with the unemployment rate below 4 percent for the longest period in 50 years, employers are feeling the pressure of a tight labor market and are considering opportunities to entice older workers back into the workforce.
More than 2,500 companies, including Bank of America, Microsoft and H&R Block, have signed AARP’s pledge to build an inclusive workforce, with the number of new signatures more than doubling over the past year. last year.
Michigan changed state law last month to make it easier for retired teachers to return to the classroom without risking their pensions, and other states are expected to follow suit as employers try to fill 9.6 million vacancies with 6.4 million job seekers.
“It’s a win-win,” Democratic lawmaker Matt Koleszar said.
“For employers, they’re filling these much-needed positions, addressing these workforce challenges, and that’s a win for these older workers. »
But older workers may not see things that way: only one in six retirees plans to interrupt their leisure time.
The reasons why some might return to the workforce varied, with retirees citing “personal reasons”, “needing more money”, “being bored”, “feeling alone” and inflation as motivation to apply for a job, according to a study conducted by Paychex.
“Boredom is a huge problem,” David Mendels, director of planning at Creative Financial Concepts, told CNBC.
“Even if you hate your job, it’s a big part of who and what you are. And when you take that away, it’s a huge problem for a lot of people.
Despite the growing eagerness of employers, the ship may have sailed for those retiring, with only 3 percent finding employment in any given year.
For those looking for work, those over 65 take an average of 31.6 weeks to find a job, compared to 22 weeks for younger people.
But AARP insists that older workers remain a potential goldmine for bosses seeking to fill their labor shortages.
“It makes perfect business sense to hire experienced workers,” said Heather Tinsley-Fix, AARP’s employer engagement manager.
“More companies are also recognizing the need to include age in their diversity, equity and inclusion efforts.”
