Millions of Baby Boomers retire each year from the U.S. labor force. But in the past year the number of retired Boomers increased more than in prior years, according to a Pew Research Center analysis of monthly labor force data. The recent increase in the share of Boomers who are retired is more pronounced among Hispanic and Asian American Boomers and those residing in the Northeast.
In the third quarter of 2020, about 28.6 million Baby Boomers – those born between 1946 and 1964 – reported that they were out of the labor force due to retirement.
This is 3.2 million more Boomers than the 25.4 million who were retired in the same quarter of 2019. Until this year, the overall number of retired Boomers had been growing annually by about 2 million on average since 2011 (the year the oldest Boomer reached age 65), and the largest increase was 2.5 million between the third quarter of 2014 and 2015.
How we did this
More than 70 million Baby Boomers reside in the U. S. Since the time that the oldest Boomers reached age 65, there has been public interest in their impact on the nation’s labor force, public social insurance programs and asset values. The COVID-19 recession resulted in a large and sharp employment contraction across generations. This analysis looked at whether retirements had accelerated among Boomers during the pandemic.
The overall number of retired Baby Boomers is derived from the monthly Current Population Survey (CPS), conducted by the U.S. Census Bureau for the Bureau of Labor Statistics. The CPS is the nation’s premier labor force survey and is the basis for the monthly national unemployment rate released on the first Friday of each month. The CPS is based on a sample survey of about 60,000 households. The estimates are not seasonally adjusted.
“Retired” in this analysis is based on labor force status. Those who cite “retired” as the reason for not being in the labor force (neither employed nor seeking work) constitute the retired Boomer population.
This is a moment-in-time measure, and increases reflect the net change of Boomers moving both into and out of “retirement” due to changes in labor force participation.
The CPS microdata files analyzed were provided by the IPUMS at the University of Minnesota.
The COVID-19 outbreak has affected data collection efforts by the U.S. government in its surveys, especially limiting in-person data collection. This resulted in about a 4 percentage point decrease in the response rate for the CPS in September 2020. It is possible that some measures of retirement and labor market activity and its demographic composition are affected by these changes in data collection.
The job losses associated with the COVID-19 recession may be contributing to the jump in Boomer retirements. Since February 2020, the number of retired Boomers has increased by about 1.1 million. Some of this increase could reflect seasonal change in employment activity. But during the February to September period last year, the population of retired Boomers rose by only about 250,000.
In September, 40% of Boomers were retired, up from 39% in February. The recent increase in the share of those who have retired has been greater for some demographic groups. Among Boomers 65 and older, the share retired has increased 2 percentage points since February, whereas the retirement rate has remained unchanged among Boomers younger than 65 (18%).
The share of Boomers who have retired differs by educational attainment. Among those with no education beyond high school, the share is up 2 percentage points since February. There has been no change among those with some college education, and for those with a four-year college degree, the share is up 1 point.
The share of Hispanic Boomers reporting they are retired has increased 4 percentage points since February (30% to 34%). And the retirement rate among Asian Boomers has increased 3 points, from 36% to 39%. Retirement is up more modestly among White and Black Boomers (1 point for each).
Looking regionally, the movement into retirement appears most prevalent among Boomers residing in the Northeast (35% in February and 38% in September).
Richard Fry is a senior researcher focusing on economics and education at Pew Research Center.
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Baby Boomers, born between 1946 and 1964, make up 28% of the United States population, making them one of the largest living adult generations, second to millennials. 10,000 Baby Boomers reach retirement age every day, meaning radical changes to the job market have already begun.
How will this affect the job market? Baby Boomers' retirement will affect many industries, particularly the IT and technology industries. This demographic has become less interested and obligated to work long hours, partially due to their high corporate rankings and because they are less defined by their career than younger generations who are newer to the workforce.
The following information describes Boomer retirement trends, why boomers are not retiring, commonly held positions by this generation, likely economic changes, and Boomer statistics.
According to Pew Research Center, the rate of retirement for Boomers has accelerated since COVID-19 began. Nearly 29 million Boomers retired in 2020, three million more than in 2019. Seventy-five million Boomers are expected to retire by 2030, paving the way for what is now called "The Great Retirement," which may surpass The Great Resignation as the most significant hiring trend for 2022.
“The Great Retirement” is an unprecedented flood of retirees exiting the workforce earlier than planned. This event was triggered by the pandemic and heavily involved Boomers. Whether it is to enjoy life, health concerns, or a changing work environment, the workforce in recent years has seen an uptick in retirement. By the fall of 2020, according to the PEW Research Center, almost 30 million Boomers had retired, an increase of 213% from the previous year.
One in four workers in the United States is a Boomer, amounting to 41 million in total.
The mass retirement likely will lead to an even wider workforce gap as companies will need to fill positions made available after the Boomers' retirement. As mentioned above, these workers generally hold higher positions, making the need for recruiters even more critical. Working with a recruitment agency can help ensure that jobs are filled by qualified candidates, facilitating an easy transition. Click here to learn more about how working with a recruiter will revolutionize your hiring process.
To avoid the workforce gap, employers can take steps involving new talent.
There are several reasons why a portion of Boomers has not yet retired.
As more boomers approach retirement, there are fewer skilled workers to take their place. This is creating what is known as a "knowledge gap," as highly demanded workers and their skills are exiting the workforce quicker than new employees can receive the necessary training and experience to replace them.
Boomers have improved health and wellness compared to previous generations. With innovation and progress in the health industry and a movement toward greater fitness and overall health, Boomers are living a healthier lifestyle than before. This has encouraged the generation to continue working and find more ways to stay productive.
Social security will not be available until age 67, meaning many Boomers will need to continue working to support themselves and their dependents. This, coupled with a lack of retirement savings, means Boomers will continue to work past retirement age.
The median 401(k) balance of those aged 55-64 is $177,805, according to a report from Vanguard. According to the "4% rule" of retirement, this translates to $7,112 per year for retirement. Despite the additional income from social security, this is not nearly enough income for most retirees to sustain their lives. 45% of Boomers report having no savings for retirement at all.
Some Boomers take the generational motto, "Live to work," to an extreme. A 2013 Gallup poll on consumer and workplace behavior of Boomers asked at what age the generation planned to retire. 10% of respondents chose "Never" as their response.
After more Boomers retire, several changes to the economy are expected. Consumer spending will be affected, as retirees both produce less and consume/spend less money. The unemployment rate is historically low, but many people are still looking for jobs, specifically young talent. When Boomers retire, it will free up jobs for younger employees.
Boomers also spend more on their adult children than previous generations, as a substantial percentage of parents provide some financial support for their adult children. In February 2020, 47% of adults aged 18-29 resided with one or both of their parents. As of July 2020, that number increased to 52%, even surpassing the previous peak seen during the Great Depression. The most common area of assistance is student loans, and although this may be a debt of the past, the financial support provided by Boomers will likely slow down after retirement.
Boomers thrive in the installation, transportation, and engineering industries. The generation is used to working with their hands and grew up before the internet. By analyzing which positions Boomers hold, we can better identify likely job openings in the next several years. Some of these common positions include:
They install commercial and residential equipment, identify and solve problems, and assist customers. This is a hands-on position, which is ideal for Boomers. 
Real estate agents complete rigorous training courses and pass a state exam to become licensed for the state they work within. This is a typical job for Boomers, some even taking the career up post-retirement.
They provide strategic leadership to managers and may be asked to fill sales, marketing, finance, or other related roles depending on the company's size. They are also in charge of approving budgets and other organizational plans. The median salary for these positions is $183,200
After earning an M.D or D.O., psychiatrists may generally practice or specialize in a specific area. The median salary for this position is $215,200The above information highlights the key aspects and future trends of one of the most demanding working generations.
Although "The Great Retirement" may be a daunting event continuing to approach the horizon, young talent is ready to be trained and fully integrated into the workforce. This transition can be better facilitated through workplace flexibility, reskilling, upskilling, and mentorship provided by those who may soon head toward retirement.
Written by Lauren Kemp
Lauren Kemp, Communications and Marketing Specialist at J2T, earned a Bachelor of Science in Business Management with a minor in Latin American studies and a Master of Science in Innovation and Management from Montana State University. Lauren hails from Montana and enjoys reading about the history of her home state. Her bucket-list items include touring the Biltmore Estate in Asheville, North Carolina, and taking an immersion trip to Chile to experience Latin American culture first-hand.
J2T is a recruiting and staffing firm that solely focuses on accounting and finance roles.
J2T Flex facilitates all operational accounting needs, both direct hire and contract or contract-to-hire needs. On the direct hire side, J2T Recruiting specializes in senior positions starting at Sr. Accountant up through CFO in both direct hire and contract or contract-to-hire needs encompassing everything in the corporate accounting and finance organizational chart. J2T is a women-owned business exclusively serving the Colorado and Montana markets with the overarching goal to serve you in all areas of the hiring experience.
In 1998, there was an important change in the demographics of developed countries - the number of people over 65 years of age for the first time exceeded the number of children.
On a global scale, this will happen in 2045. The process of population aging is faster in developing countries than in developed ones, although the proportion of people over 65 is higher in the latter. As a result, developing countries will face greater challenges in dealing with population aging.
SELECTED COUNTRIES
Since 1980, there has been an unprecedented increase in the number of young people around the world, driven by falling infant mortality and high birth rates. This has led to a dramatic increase in the number of people aged 15 to 24. In 1980, it was 34 million, and by 2015 it will be 73 million.
Thanks to the development of education and family planning, the birth rate in the Arab world has begun to decline. However, the existence of a large youth population, which will continue to be the driving force behind economic development over the next two to three decades, will become a burden on the economies of the region by 2050.
Currently, people over 65 make up only 4% of the population in the Arab world, and in some extreme cases, such as in the United Arab Emirates, only 1%. However, in 2025, a sharp increase in the number of older people will begin. Although the process of population aging in the Arab countries is still at an early stage, the number of people over 65 years of age will turn into a serious problem for the entire society and economy by 2050, not to mention the pension system.
UK
In the coming year, there will be a sharp jump in Britain in the direction of increasing the number of people over 65 years old. The first of the post-war baby boomer generation, born between 1946 and 1964, will begin to retire, and by 2050 one in four Britons will be over 65.
British pensioners have a higher income than in most countries of the world. The post-war generation had an unprecedented level of access to free education, health care, affordable housing and jobs.
This makes them one of the wealthiest population groups. They own 40% of real estate in the country, and one in five of them has a second home. 40% of voters in Britain are over 55 years old, and in the future politicians will increasingly have to take into account the interests of this population group.
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People around the world are living longer and longer. In 2010, the average life expectancy was 69 years. In 1950, she was 47 years old. This indicator is closely related to the level of GDP. In most developed countries, the average life expectancy is 78 years.
In developing countries, it stands at around 67 years, and in the least developed - 58 years. But even in the least developed countries over the past 60 years, there has been a sharp jump in life expectancy - at 19In 50, he was 36 years old. Currently, the financial burden associated with increased life expectancy falls mainly on developed countries. In countries that are members of the Organization for Economic Cooperation and Development, the average time between retirement and death is about 20 years. Women live longer than men and therefore form the majority in this population group.
SELECTED COUNTRIES
Japan can be proud of the highest average life expectancy of its citizens - 83 years. People over 65 make up 21.4% of the country's total population, the highest figure in the world. In Japan, as in many other countries that participated in the Second World War, the explosion in the birth rate occurred in the period immediately after the end of the war.
But if in the USA and Britain this surge lasted for almost 20 years - from 1946 years until the mid-1960s, in Japan it did not last long - 1946-47. In these two years, an average of 2.7 million babies were born in the country. And already in 1950, the number of newborns dropped to 2.3 million. Now the generation of Japanese baby boomers is approaching retirement age, which will cost the Japanese pension system and the economy as a whole dearly. By 2050, there will be one pensioner for every working Japanese. The country is discussing the possibility of abolishing mandatory retirement periods. Now the retirement age is 65, but usually Japanese men retire at the age of 70.
In the case of Russia, the gap in life expectancy between men and women, currently 12 years, is one of the highest in the world. Russian men live on average 62 years, and their retirement age is 60 years. High mortality among men is attributed to alcoholism, infectious diseases, including HIV, accidents and the prevalence of cardiovascular diseases.
Due to the fact that Russian women live an average of 74 years, the total number of people over 65 in Russia is only 4% lower than in other European countries. At the same time, in the EU countries, the average per capita income is about 30 thousand dollars a year, while in Russia it is only 10 thousand. Despite this, Russia spends about 10% of its GDP on pensions, the same amount as the EU countries.
The first pensions in history came when very few lived to see them. In 1889, in Prussia, Otto von Bismarck introduced pensions from the age of 70. Life expectancy was then 45 years. In 1935, when President Franklin D. Roosevelt proposed the Social Security Act, the official retirement age was 65, three years longer than the average life expectancy in the United States. In the same year, America spent just 0.2% of its GDP on pensions - now the figure is 6%.
SELECTED COUNTRIES
The official retirement period in Greece is 65 for men and 60 for women.
However, civil servants often retire much earlier. Given that a quarter of the Greek population is over 60, and that a Greek aged 60 can expect another 22 years of life, the pension system is in dire straits. Greece spends 11.2% of its GDP on public pensions. As part of its commitment to reduce the budget deficit, the Greek government is considering raising the retirement age in line with increased life expectancy, as well as raising the retirement age from 37 to 40 years.
The average official state pension age in OECD countries ranges from 63 to 64 years. However, the actual retirement age can be very different from these figures. In Austria, for example, where men receive a state pension at 65, it is customary to leave work at 59. Similar figures are typical for Belgium and France. In Japan, retirees have the longest delay in leaving their jobs, typically 4 years on average.
Norway has a significant percentage of its population over the age of 65, yet it spends relatively little on pensions – just 4.
8% of GDP. The main reason is that the retirement age there is one of the highest in the world - 67 for both men and women. This means that 33% of working men and 23% of working women in Norway are over 60, which eases the burden of the pension system in this country.
This ratio is an important indicator of the demographic and economic challenges that a country will face in the future. It shows how many working people account for one pensioner. By 2050, this figure will decrease in all countries of the world. In developed countries, it will drop to two workers for every pensioner. In less developed countries, this indicator will remain high, but in the absence of GDP growth, this situation will be accompanied by economic problems.
SELECTED COUNTRIES
The ratio of pensioners to workers in most African countries will remain at 10 to 1 even by 2050. This is partly due to high birth rates and the relative small number of the population over the age of 65.
Some demographers call such a large excess of the number of workers over the number of pensioners a real miracle. This reflects the consumption share of GDP in countries such as Chad, Ethiopia and Zimbabwe, which are 0.1%, 0.3% and 2.3% respectively. It must be borne in mind that these countries have the lowest GDP in the world, but they will also face the problem of an aging population, although much later than the rest of the world. The OECD urges developing countries to be aware of this problem and take timely action to address it.
In the same period, the ratio between working and pensioners will be halved in Russia, Belarus and Ukraine. This will become a major problem in the countries of the former Soviet Union, where pension contributions make up a relatively high proportion of the budget, a legacy of socialism. The countries of the former USSR will face two problems: firstly, the number of pensioners who are entirely dependent on the state is growing in them and the number of employees who pay taxes is decreasing, and secondly, in these countries the level of GDP is lower than in developed countries.
By 2050, this problem may become especially acute.
In all developed countries, the number of older people receiving pensions is increasing, which creates an additional burden on state budgets. In countries that are members of the Organization for Economic Co-operation and Development (OECD), the level of spending on pensions increased from 6.2% in 1995 to 7.2% in 2009.
In developing countries, the share of GDP devoted to pensions remains low. This is largely due to both the high percentage of the young population and the shortcomings of pension systems in these countries. However, the developing world will also inevitably face the same problems - the aging of the population and the rising cost of maintaining pensioners.
SELECTED COUNTRIES
In terms of retirement costs, the US lags behind OECD countries, where it averages 7.2%. Those OECD countries that spend more on pensions - Germany, Spain, Portugal, Finland, France, the Czech Republic, Sweden - face the problem of population aging.
An interesting situation is emerging in Turkey and Mexico, where the population over 65 is only 6%. Turkey spends 7.8% of its GDP on pensions, more than the OECD average.
As Turkey's population ages, it will be difficult to maintain this level of pension payments. Mexico spends only 2.4% of its GDP on pensions, but this is mainly due to the shortcomings of the country's pension system. According to the OECD, only 35% of Mexican workers have a pension.
Ukraine spends more on pensions than any other republic of the former USSR - 15.5% of GDP. That's more than Italy, which spends 14% of its GDP on it, the highest among OECD countries. This is curious, since in Italy the population over 65 years old is 20%, and in Ukraine - 16%. In addition, per capita income in Italy ($35,400 per year) is 10 times higher than the income of an average Ukrainian ($3,040 per year).
Table: life expectancy and pensions in different countries
June 14, 2018, 11:51
TASS-DOSIER. On June 14, 2018, Russian Prime Minister Dmitry Medvedev announced that the government was proposing to gradually raise the retirement age to 65 for men and 63 for women. This age limit will be lower than in many countries of the world, including such European countries as Great Britain, Germany, Italy. The TASS-DOSIER editors have prepared material on the retirement age in different countries.
In the UK, the retirement age for men and women is 65 (for women it was raised from 60 in 2016-2017). In 2019-2020, this bar will be increased to 66 years, and in 2026-2028 - to 67 years. A further increase in the retirement age is planned in 2044-2046 to 68 years (in connection with the latest studies on life expectancy, the possibility of making these changes as early as 2037-2039 is being considered).
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Changes in the pension system. How the government sees it
In Germany, a phased increase in the retirement age from 65 years (for men and women) to 67 years has been carried out since 2012 on the basis of a law adopted in 2007.
The process will end in 2029. Until 2024, the retirement age will increase by one month per year, then by two months per year. On July 1, 2014, amendments to pension legislation came into force. In particular, citizens who have worked for 45 years or more will be able to retire at 63.
In Italy, pension reform started in 2012. As a result of the reforms, the retirement age for men and women was equalized - 66 years and seven months. For civil servants, the changes came into force on January 1, 2016, for private sector employees - from January 1, 2018. Citizens with 41 years of work experience have the right to early retirement. Before the reform, men retired at 65, and women, depending on the sector of employment, at 60-65.
In France, in 2017, the French retirement age was increased from 60 to 62.5 years. The exception is people who started working at the age of 18, suffered from accidents at work and received a disability, participants in the war, as well as those who have at least 41 years of experience - they can retire at 60 years old.
The French government plans to gradually increase the minimum retirement age to 67 by 2023.
In the US, the retirement age is determined by the year of birth: for people born before 1960 (both men and women) - 66 years, for people born in 1960 and later - 67 years. Americans can start early retirement at the age of 62, but at the same time they lose part of the payments.
In Argentina, the retirement age is 65 for men and 60 for women. In Colombia, men can retire at the age of 62 and women at 57. In Chile, the retirement age for men is 65 and for women it is 60.
In Israel in 2004, the retirement age was increased from 65 to 67 for men and from 60 to 62 for women. By 2017, it was planned to raise the retirement age for women to 64 years (by 2030 - up to 67 years), but the authorities are still delaying this decision.
In China, the pension system covers only a small part of the population, these are government employees and people employed in industry.
