Over the past year, there’s been a 213% increase in retirements! This massive increase perplexes me why so many boomers are choosing to retire now. Is this pandemic related or does this reflect a growing exodus?
With 10,000 Americans turning 65 years of age each day, one might expect a somewhat regular trend.
According to the PEW Research Center, on average (since 2011) around 2 million people retire each year. In 2020, they reported 3.2 million, a dramatic increase from 1.5 million in 2019 (213%).
The reasons baby boomers are retiring more than ever before includes:
1. Job Dissatisfaction Due to Boring Repetitive Work
One of the underlying reasons baby boomers are deciding to retire more than ever before is a lack of job satisfaction. In fact, an estimated 85% of workers dislike their jobs. After a lifetime of drudgery in an unfulfilling job, who isn’t ready to leave?
In short, these folks are ready to retire or at least move on to something more interesting and enjoyable. Some of the factors contributing to this include:
For those with an interesting and fulfilling career, they might prefer working a few more years. Yet, the overwhelming majority dream of the day they can leave the rat race.
Once reaching the magical age of 62, they’re eligible for Social Security and they vanish from the workforce. Our post, what age to retire identifies 62 as, by far, the most common age.
2. Struggling with a Changing Work Environment
Change can be stressful, especially when forced upon you. And, the COVID pandemic this past year has created massive upheaval. Entire industries such as airlines, hospitality and tourism were devastated.
This also required many organizations to dramatically change how they conducted business. For instance, “working from home” became the norm for many. This paved the way to reducing expensive office space and real estate costs.
Many companies embraced this policy as a means to operate more efficiently. But not everyone enjoyed the experience of being cooped up at home. They missed the office atmosphere and camaraderie.
Alternatively, others may have enjoyed the flexibility of working from home. No longer the daily commute or being shackled to a cubicle.
Ironically, often they’re the ones being told its business as usual and they’re expected back in the office. Either situation is sufficient to say to yourself “enough is enough”.
3. Ageism and Job Loss
Age discrimination is alive and well! For decades, companies have strived to incent older employees to leave. In general, they’re more expensive with higher salaries, greater paid leave and higher cost benefit plans.
In addition, a common perception is older individuals aren’t as tech savvy. In effect, once we’re in our 50’s, many organizations begin to view us as a liability rather than an asset.
According to Market Watch, 78% of people saw or experienced workplace age discrimination in 2020. This was up from 61% in 2018.
With the economy faltering throughout 2020, older employees were more likely to experience layoffs. In fact, they were 17% more likely to be let go than their younger cohorts. Our post what is forced retirement delves deeper into ageism.
4. Enjoying Life
One of the most common questions is whether it’s worth working a few more years. The stark reality is none of us are getting any younger. What’s the opportunity cost of hanging on? The following are examples of what you might be missing out on:
While you’re still healthy and active, you have the opportunity to pursue those things most important to you.
5. Health Issues
Some may, already, be suffering some health issues. Rather than let it worsen or deteriorate, baby boomers are retiring to make sure they’re still healthy enough to enjoy retirement.
Or, maybe it’s a family member that needs some assistance or another personal reason. Then there’s the situation of being in a toxic workplace. Not only does it affect your mental health but your physical as well.
My wife is a perfect example. Her physical health deteriorated to the point her blood pressure was at stroke levels. You can read more about this in our post bad boss.
Shockingly, according to the CDC, six in ten adult Americans live with at least one underlying condition.
As if these numbers weren’t bad enough, as we age, we’re susceptible to degrading health. Statistics from the CDC report:
By the age 65, the number of Americans with at least one chronic condition increases to 85.6%! Understandably, many folks seriously question the wisdom of trying to squeeze out a few more years working at an uninspiring job.
6. Desire to Be Their Own Boss
If you were to look up who’s started the most businesses in the last few years, it would be the boomers. There’s something challenging and appealing about being your own boss. And, frankly, after years of reporting to “the man”, they’ve had it!
These people don’t plan to have a traditional retirement of leisure. They want to do something more valuable with their time making a difference. Building upon their expertise or following a passion becomes highly attractive to them.
What they don’t want is someone telling them what to do!
They might consult in their field of expertise, start a local business or pursue something online. For them, it’s about the challenge and something they enjoy.
The interesting part is boomers are far more likely to be successful in a new venture than their younger counterparts. This might be attributed to a lifetime of learning, network of contacts and ability to self-fund.
Impact of Baby Boomers Retiring
This is the decade baby boomers are retiring more than ever before!
As the largest generation, we have the greatest impact on the workforce. With birth rates dropping steadily over the decades, there’s not a large labor force waiting in the wings.
Most of us have gained an incredible amount of knowledge and expertise over the years. We're integral to organizational success and not easily replaced. When we leave, we take our talent and experience with us.
Yet corporate America has downsized and outsourced for years. In their quest for bottom line profits, they whittled away their most experienced employees.
As a result, there’s not much loyalty or trust remaining. As we were forced out the door, very little knowledge was transferred to the younger generations.
The pandemic further exasperated this trend with wide spread layoffs and closures. Companies are just beginning to realize their peril.
With the economy beginning to recover, our generation is embracing retirement. Other than a paycheck, there’s not much to incent us to stay.
The U.S. government spent trillions of dollars in stimulus packages. Even with a strong economy, it'll take decades to fully recover from this spending.
With so many retiring, the tax base will shrink. Even worse, there'll be greater strain on the social security system.
Closing Thoughts on Reasons Baby Boomers are Retiring
With a 213% increase in boomers leaving the work force, has the mass exodus just begun?
The pandemic may have triggered a major rethinking about working a few more years. My suspicion is we’re going to see more and more people retiring in ever greater numbers.
Unlike previous generations, boomers tend to view work as a means to an end. They don’t live to work. In general, we have a zest for life and making the most of it.
When work isn’t rewarding and fulfilling, you should be questioning if it’s worth it. Especially when you consider, on average, we’re living longer healthier lives. Who doesn’t want to enjoy the fruits of their labor?