Americans Plan To Retire Earlier Than Ever — How Will the Economy Respond?
New data from the New York Federal Reserve suggests that Americans are less likely to work into their mid-to-late 60s. The July labor-market survey found that the average chance adults expect to work beyond the age of 62 is 50.1%. This number is down from 51.9% just one year prior — the lowest since the Fed’s survey began in 2014, according to Bloomberg. The number of Americans saying they’ll likely be employed over the age of 67 also dropped to 32.4% — down from 34.1% one year ago.
While early retirement is good news for workers, it could present challenges for the U.S. economy. Citing data from the Bureau of Labor Statistics, Business Insider reported that more than one million older workers have left the workforce since COVID-19 hit the U.S. in February 2020.
Roughly 1.5 million Americans blamed the pandemic for staying out of the labor force in August, according to government data, while others likely stayed out due to a lack of attractive employment options. Insider noted that the latest Fed data also suggests that early exits are the new normal and not a pandemic-era event.
Early retirement could force employers to turn their focus towards younger workers, as employers have grown increasingly reliant on older workers over the past two decades, notes Insider. Employment for workers under the age of 55 has been mostly flat since 2000, while employment for Americans 55 and older has grown by nearly 20 million employees, according to the Bureau of Labor Statistics. This suggests that the American economy has been increasingly reliant on workers less than a decade away from the average retirement age.
Employers will need to start looking to younger generations to fill the jobs of those going into retirement.
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Last updated: September 10, 2021