- Pandemic-era rush to retirement still showing little sign of slowing
- But tightening labor market has left employers scheming to bring them back
A wave of retirements has hit the US leaving companies scrambling to fill roles and more Americans enjoying time without work.
There are about 2million more people who have retired than official forecasts predicted.
The percentage of the adult population in retirement has soared from 15 percent in 2007 to just under 20 percent, accelerating steeply since 2020 and defying predictions by the St. Louis Federal Reserve.
‘While the gap seemed to be closing earlier in the year, it seems to have widened slightly since then,’ Miguel Faria-e-Castro of the Federal Reserve Bank of St Louis told Bloomberg.
‘As of September, we estimate about 1.98 million excess retirees.’
There are about 2million more people who have retired than official forecasts predicted
The percentage of the adult population in retirement has soared from 15 percent in 2007 to just under 20 percent, according to a study by the St. Louis Federal Reserve
According to the Bureau of Labor Statistics, the average retiree earns a pre-tax income of $55,335 – and spends approximately $52,141 of it per year. But 75% of this spending goes on four key areas
Half the wealth in the US is now held by people born before 1965, a study found this summer, helped by decades of surging house prices and falls in relative wages for younger people.
But with unemployment below 4 percent for the longest time in 50 years, employers are feeling the pressure from a tight labor market and eyeing opportunities to tempt seniors back into the workforce.
More than 2,500 businesses, including Bank of America, Microsoft and H&R Block have signed the AARP pledge to build an age-inclusive workforce with the number of new signatures more than doubling over the last year.
Michigan tweaked 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 job vacancies with 6.4 million jobseekers.
‘It’s a win-win, said Democratic state legislator Matt Koleszar.
‘For employers, they fill these much-needed positions, address these workforce challenges, and it’s a win for these older workers.’
But older workers may not see it that way with just one-in-six retired people considering an interruption to their leisure.
The reasons to some might return to the workforce varied with retires citing ‘personal reasons,’ ‘needing more money,’ ‘getting bored,’ ‘feeling lonely,’ and inflation as their push to apply for jobs, 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 increasing eagerness from employers, the ship may have sailed for those who retire with just 3 percent getting a job in any one year.
For those that are looking for work, over-65s take an average of 31.6 weeks to find a job, compared with 22 weeks for those younger.
But AARP insists older workers remain a potential goldmine for bosses looking to plug their labor gaps.
‘It makes great business sense to hire experienced workers,’ said AARP employer engagement chief Heather Tinsley-Fix.
‘More companies are also recognizing the need to include age in their diversity, equity and inclusion efforts.’