The 'Great Retirement' Disconnect That Puzzles US Economists
The retired share of the population is now substantially higher than before COVID-19, according to a Federal Reserve analysis.
March 23, 2022 at 01:47 PM
4 minute read
The pandemic pushed millions of older Americans out of the labor force. It should have spawned a surge in Social Security benefits applications, but it hasn't. Perhaps because they aren't retired.
The disconnect has economists wondering how many of these baby boomers might come back to the workforce, a key question when job openings have remained near record levels for months now.
Here's a look at the data and the debate it has spurred:
The retired share of the population is now substantially higher than before COVID-19, according to a Federal Reserve analysis. About 2.6 million older workers retired above ordinary trends since the start of the pandemic two years ago, based on estimates by Miguel Faria e Castro, an economist at the Federal Reserve Bank of St. Louis.
Under the U.S.'s federal retirement program, eligible workers receive a percentage of their pre-retirement income in monthly payments from the government. Workers can start receiving Social Security payments at age 62, with full benefits coming at age 66 or 67 depending on their date of birth.
Despite the surge in baby boomers saying in surveys they retired, applications for Social Security benefits have been fairly flat, based on calculations by the Boston College Center for Retirement Research. Around 0.1% of the U.S. population 55 and older have applied each month, which is consistent with what was happening before the pandemic.
The lack of Social Security filings is a bit of a mystery for Laura Quinby, a senior research economist at the Center for Retirement Research. Older Americans often feel the need to apply for benefits in person, so the closure of the Social Security Administration's local offices during the pandemic might have dissuaded some from applying.
Others might be waiting to reach their late 60s to be eligible for full benefits, Quinby said. Thanks to the COVID-era boom in stock and real estate values, individuals who own assets and have savings can afford to delay applying.
The surge in assets made this an "opportune time for some workers to step out of the labor force and stay out of the labor force," said Lowell R. Ricketts, data scientist for the Institute for Economic Equity at the St. Louis Fed.
"But we're still expecting a steady, steady trend that some might want to come back," he said, especially with the advent of remote and hybrid work, which may lure seniors back to the job market.
Unlike in other developed countries, retirement isn't necessarily a permanent shift in the U.S. Before COVID, it wasn't uncommon that Americans would "un-retire," out of financial hardship or personal choice. It's too early to tell whether the pandemic has changed that dynamic permanently or not.
The Social Security Administration's Office of the Chief Actuary suggested older people may have "retired" from one job and continued working in another. That would explain why they're not applying for benefits.
And people under 62 wouldn't qualify for Social Security anyway. Among them is Hope Cabot, 61, who left her teaching job in Roswell, Georgia, in December. The stress of caring for a mother and of having to teach virtually pushed her to retire sooner than she anticipated. She plans to be a substitute teacher to stay busy and bring in some extra cash to help keep up with high inflation, she said.
"During the pandemic, it was crazy," she said. "I was not planning on retiring until the end of this year or the end of next year."
So far Bureau of Labor Statistics data on labor participation show that some baby boomers have come back, while many are remaining on the sidelines.
It's possible that COVID-19 has led to a reckoning for a generation that reached retirement age when a global pandemic hit their age group disproportionally and threatened life as we knew it. It makes it even more difficult to predict if and when they might look for a job again.
"Just as is the case with younger workers who have seen opportunities to think differently about their lives, people in this demographic are thinking, 'What do I really want to do with my life,'" said Doug Dickson, who chairs the Encore Boston Network, which helps older workers find a job or volunteer opportunities. "Are they really retired or are they just defaulting to that language because it's the easiest way to characterize it?"
Michael Sasso and Alexandre Tanzi report for Bloomberg News.
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllU.S. Eleventh Circuit Remands Helms-Burton Trafficking Case Involving Confiscated Cuban Port
3 minute readMiami Lawyer Guilty of Indirect Criminal Contempt But Dodges Paying Legal Fees
4 minute readTrending Stories
- 1'It's Not Going to Be Pretty': PayPal, Capital One Face Novel Class Actions Over 'Poaching' Commissions Owed Influencers
- 211th Circuit Rejects Trump's Emergency Request as DOJ Prepares to Release Special Counsel's Final Report
- 3Supreme Court Takes Up Challenge to ACA Task Force
- 4'Tragedy of Unspeakable Proportions:' Could Edison, DWP, Face Lawsuits Over LA Wildfires?
- 5Meta Pulls Plug on DEI Programs
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250