Statistics on Retirement Trends
I have been wondering how the 2020 pandemic has affected retirement plans of seniors. Are baby boomers retiring in the numbers they always did or has all of that changed now? Has it had an impact on your plans or have you left work behind you?
Before we look at the stats, let’s revisit which years actually define a baby boomer. This was demographic was born out of a post-war boom, so we are looking at the years from 1946 to 1964. This means that the first years that boomers reached 65, a common retirement age, would have been 2011.
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Are Baby Boomers Retiring in the US?
The Pew Research Center reported, in the middle of 2019, that Baby Boomers were staying longer in the workforce. Many held the expectation that they would continue working beyond the age of 65.
However, that seems to have changed in 2020.
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In the USA, we saw a marked increase in the number of baby boomers who retired in 2020, compared not just to 2019 but compared to earlier years as well. This figure was in the vicinity of about 28 million baby boomers. We are talking about the last quarter in 2020.
How does this compare to the same time in the previous year?
Approximately 25 million baby boomers were recorded as being retired in 2019.
According to the Pew Research Center, this increase, of approximately 3.2 million per year, exceeded the average yearly increase of 2 million retired baby boomers.
This trend raises a number of questions:
- Was this because of job losses as a result of business closures during a pandemic year?
- Was it an outcome of Covid lockdowns?
- Are people feeling safer in their own environments and therefore opt not to work if finances allow?
- Or is it simply because we have many more baby boomers coming through the ranks and approaching retirement age?
Are Baby Boomers Retiring in Australia?
How do these figures compare with Australia?
As elsewhere, a Covid-dominated 2020 has seen a shift in workplace demographics.
Australia is an ageing society, in no small measure as a result of health improvements, provision of medical facilities and smaller families.
The average life expectancy of an Australian in 1940 was just 63, according to an article published on https://www.superannuation.asn.au/. That almost seems hard to get one’s head around. But then we are talking 1940.
When we compare that to today, we are looking at approximately 83, quite a jump.
According to the Australian Bureau of Statistics retirees numbered just under 4 million in the financial year ending 2019. Just over half of those (55%) were aged 55 or older.
I am still waiting to see the figures for 2020 but I would expect an increase given the number of businesses that did close.
Of course this depended on the state. Queensland has fared much better, so far, than some of the other states. However, thanks to fast lockdowns, most states are now managing small outbreaks very quickly.
By 2020, approximately 16% of the Australian population was 65 years of age or older. This is a higher percentage of course than 40 years ago.
So in answer to my last question in the previous section, this fact can indeed be a contributing influence on the increase in numbers of baby boomers retiring last year.
Baby Boom or Baby Bust?
I hadn’t really thought about this impact but it is something that demographers have been talking about for years.
The term, Baby Bust, refers to the situation where baby boomers in their advancing years, end up leaving the workforce at a faster rate than they are being replaced by their younger counterparts.
There is a book that has been written on this very subject:
Yes, Baby Boomers are retiring. This would be a natural outcome as they approach 65 and older.
2020 has been a tough year for each of the generations, some more than others. This could have accelerated the decision of some Baby Boomers to opt for retirement. By the same token, some who were about to retire might have decided to hang on a little longer if retirement funds had been impacted. This of course would be dependent on work availability.
Let’s hope that 2021 can see a swift turnaround with respect to both health and finances in all countries.