Older Americans Are Retiring in Droves
More and more baby boomers begin the new year with nothing on their schedule but plans to golf, travel, and spend more time with the grandkids.
The number of Americans aged 65 or older without a disability that aren't in the labor force rose by 800,000 in the fourth quarter of 2016, marking the resumption of a long-standing trend: the exodus of their generation from the work force and into retirement.
For more than five years, the six-month trend for this figure — a significant demographic source of downward pressure on the headline labor force participation rate — had been heading higher, before plateauing for most of 2016. The labor force participation rate for this cohort tanked by a full percentage point, to 23.6 percent, in the final quarter of the year.
Data on flows in and out of the labor force back up this story, with the six-month trend in Americans moving from employment to outside the workforce (a loose proxy for retirements) notably accelerating since October.
Whether a larger share of senior citizens had previously been incented to remain in their jobs by higher wages or by a need to keep working in order to rebuild their nest eggs after the financial crisis is still an open question. But the recent non-farm payroll reports affirm that the secular trend of rising retirements can only be delayed for so long.