NAFCU Journal January February 2022

10 THE NAFCU JOURNAL January–February 2022 RETIRING IN THE AGE OF COVID By Curt Long THE BOTTOM LINE One of the COVID-era labor market trends garnering attention is a rise in retirements. The share of Americans identifying as out of the work force due to retirement trended steadily higher over the past decade as the Baby Boomer generation reached retirement age. However, in the spring of 2020 there was a large surge of retirements, which was maintained over the months that followed. Data through October 2021 indicates that there are over 2 million more retirees than would have been expected based on the pre-COVID trend. With job openings reaching all-time highs, many employers may be wondering what is causing the retirement rush and hoping that the recent trend may reverse itself. Research from the Federal Reserve Bank of Kansas City showed that flows from the labor force into retirement have been steady during the pandemic. However, flows from retirement back into the labor force collapsed. Traditionally, many retirees remain marginally attached to the labor force and tack back and forth between retirement and employment. The rise in overall number of retirees was the result of these individuals declining to re-enter the labor force at the same rate that they had historically. It is likely that early in the pandemic, COVID fears played a role in keeping retirees on the sidelines. This would explain the sharp rise in retirees in Share of the U.S. Population Not in Labor Force Due to Retirement Source: NAFCU Research analysis of Current Population Survey monthly files (IPUMS) 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 17 16 15 14 13 12 11 10 percent Pre-COVID Trend