The number of Americans aged 65 or older without a disability that aren’t in the labor force rose by 800,000 in the fourth quarter of 2016, marking the exodus of the baby boomer generation from the work force and into retirement.
Some newly retiring boomers had previously been incentivized to remain in their jobs by higher wages or by a need to keep working in order to rebuild their nest eggs after the financial crisis but the recent payroll reports confirm rising retirement.
For more than five years, the six-month trend in the graph above is a significant source of downward pressure on the headline labor force participation rate, it then began plateauing for most of 2016. The labor force participation rate for the last quarter of 2017 tanked by a full percentage point, to 23.6 percent.
Data on flows in and out of the labor force back up this story, with the six-month trend in Americans moving from employment to outside the workforce (a loose proxy for retirements) notably accelerating since October.
Retiring this year? Check out this article on After Fifty Living, on tips you need to know!