More than 3 million Americans retired early because of the COVID-19 crisis, new research has found. That equals more than half of the workers still missing in the labor force from pre-pandemic levels.
The estimate, calculated by St. Louis Federal Reserve economist Miguel Faria-e-Castro, suggests that the boom in early retirements shows no sign of abating.
Back in April, government surveys suggested that 2.7 million Americans age 55 or older were contemplating retiring sooner than they’d imagined.
The surge in stocks and housing values during the pandemic has made it possible for young boomers with a nest egg to retire. Senior wealth rose as soon as the second quarter of 2020, as asset values quickly recovered from the initial shock of the lockdowns.
That’s especially true among the youngest baby boomers — who are 57 this year. Real net worth of Americans age 55 to 64 rose by 14.2% between the fourth quarter of 2019 and the second quarter this year, Faria-e-Castro calculated.
“We’ve really met a once-in-a-generation ‘take this job and shove it’ moment,” Harvard economist Lawrence Katz said in an interview with the Harvard Gazette. “Upper-middle- class and well-off people are doing quite well with the stock market boom and have saved a lot.”
The surge in wealth and savings masks disparities that were exacerbated by the COVID-19 crisis. Older workers who lack assets can’t afford to retire early. Others who lost their jobs and haven’t been able to find a new one were forced to retire before they were ready.
In a blog post, Faria-e-Castro said it remains to be seen whether the retirements are permanent. Whether these people come back, and if they do, how many, will have a huge impact on the U.S. workforce, which is still missing more than 5 million people from pre-pandemic levels.