Why More Americans are Retiring Now Than Ever

Q: I’m in my mid 60’s but not ready to retire yet.  Although I’m considering a move to another company that will provide a more flexible work schedule. Is it crazy to even consider this at my age?

A: No, it’s not crazy, if you’re considering a move that makes good sense for you, and not just following the herd.  While there has been an uptrend of folks stepping into retirement, we see people, at all ages, rethinking their priorities and work/life balance.  If you want to keep working, why not continue forward on your terms.

They’re calling it the Great Resignation. This unprecedented phenomenon is observing numerous Americans leave their jobs—some for greener pastures, others for extended periods, and still others, especially older Americans, for retirement. While endless column inches on this matter have been published, one of the big questions is why it’s happening here and now.

The most natural answer is that this is an appropriate response in the wake of the COVID-19 pandemic. It’s difficult to find anyone or anything that hasn’t been affected by the pandemic. While some people are choosing to stay home because they aren’t interested in risking illness to go into the office, the full picture is a bit more complex, especially for those with jobs where remote work isn’t an option. But there’s another factor at play here. It’s been a long time coming but hasn’t been talked about much because of other more pressing world events.

The Baby Boom Meets the Retirement Boom

These last few years have been a bit different than they were in the past. Reaching retirement age now doesn’t mean exiting the workforce completely. Many retirees start businesses, shift to part-time work, or change their focus from their jobs to working for charities or nonprofit organizations. In 2008, the oldest baby boomers reached age 62. This coincided with the so-called “Great Recession,” when the economy declined and perhaps represented a less-than-advantageous time to start retirement. Many people decided to hold off on retiring and wait a few years. In 2021, the economy had distanced itself from those events and faced new developments. Just over half of adults aged 55 or older had exited the workforce and retired. For adult Americans aged 65 to 74, the percentage who had left the workforce was 66.9%, just over two-thirds of this population.1

Catching Up

So, rather than seeing everyone head to the door simultaneously, what we’re seeing is a bit of a “catch-up” period. We are looking at a picture of what might have been if the Great Recession had gone a bit differently. The pandemic created a transition period in which people decided that it was a natural time to work less, transition to new things, or retire completely. The pandemic has gone on way longer than any of us could have imagined, with the more potent Delta variant making way for the more contagious Omicron variant. Examining this context makes it easier to see why someone reaching the end of a long and rewarding career might choose to exit the pattern of working during COVID-19 and parachute into a less stressful, more enjoyable paradigm.

Is It Your Time, Too?

You might be thinking that this period of mass retirement presents you with an opportunity to cast off the yoke and ease into retirement. Despite the large numbers of people making this big transition, it is important to remember that moving with the crowd isn’t always a justified action.

It’s also possible that now is a great time to transition into a different opportunity for your last few years of work. Maybe you have a business idea you’ve been working on. Now is a great time to put it into action. Or perhaps you want to transition into a new role at work or with a different firm that will be less demanding when you finally transition into retirement. This is also a great idea.

If you think now is the time, your first step is to set up some time to talk with your friendly financial representative. They can look at your overall financial strategy to give you a better overview of where you stand and the drawbacks and advantages of retiring, or making a job change in the current environment.

Sources:

1https://www.pewresearch.org/fact-tank/2021/11/04/amid-the-pandemic-a-rising-share-of-older-u-s-adults-are-now-retired/

Jeremy R. Gussick is a Certified Financial Planner™ professional affiliated with LPL Financial, the nation’s largest independent broker-dealer.*  Jeremy specializes in the financial planning and retirement income needs of the LGBTQ+ community and was recently named a 2021 FIVE STAR Wealth Manager as mentioned in Philadelphia Magazine.** He is active with several LGBTQ+ organizations in the Philadelphia region, including DVLF (Delaware Valley Legacy Fund) and the Independence Business Alliance (IBA), the Philadelphia Region’s LGBT Chamber of Commerce.  OutMoney appears monthly.  If you have a question for Jeremy, you can contact him via email at [email protected]

This content is developed from sources believed to be providing accurate information and provided with the assistance of Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

Jeremy R. Gussick is a Registered Representative with, and securities and advisory services are offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.

*As reported by Financial Planning magazine, June 1996-2021, based on total revenues.

**Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2020 Five Star Wealth Managers.