Silver tsunami: Rising retirement rates, as a record number of Americans are set to turn 65

Twilight zone

‍With markets rising, consumer confidence holding up, and a wave of companies enforcing return-to-office mandates, for many Americans, it seems like the perfect time to finally hang up their hats. Indeed, the US recorded 2.7 million more retirees in December than were predicted in models from economists at the St. Louis Federal Reserve, as reported by Bloomberg.

The recent upswing mirrors the ‘Great Retirement’ wave of 2020, when the pandemic saw the actual share of retirements swell and the labor force participation rate fall by 3.2% in the space of 2 months, the largest drop on record. However, rather than a deadly virus, what’s driving a significant portion of today’s retirees seems to be bolstered 401(k) balances.

‍Silver tsunami

‍With many already enjoying their golden years, a record 4.1 million people are set to celebrate their 65th birthday in the US in 2024 — as the mid-century baby boom ripples into a wave of present-day pensioners, dubbed the ‘silver tsunami’.

But, while there has been a spike in retirees, many in that age group aren’t looking to stop working any time soon. Indeed, over a longer time frame, the proportion of Americans aged 65+ who are employed has actually risen. A Pew Research study found that, 40 years ago, ~11% of Americans aged 65+ were working; today, it’s 19%... so there might still be a couple of years before the US hits peak retirement.