Crown Advisors reposted this
Succession planning and retirement by the numbers - this is fueling our business - A retirement surge is here - by Paul Davidson - USA TODAY A historic inflation spike is easing, but there’s a powerful force that’s likely to keep wage and price increases higher than normal over the next few years: baby boomer retirements. A record 4.1 million Americans are set to turn 65 this year and each year through 2027, according to the Alliance for Lifetime Income’s Retirement Income Institute. Although not all of those boomers will hang it up, the surge of freshly minted 65-year-olds – known as "peak 65" – probably will mean record retirements as well. How will baby boomers retiring affect the economy? - The deluge of retirees is expected to keep job openings elevated and force employers to raise pay to attract job candidates from a more slowly growing labor force. There were 8.1 million job vacancies in May, Labor Department figures show, down from a record 12.2 million in March 2022 but above the pre-pandemic average of about 7 million. Though openings are likely to continue to decline, they’ll probably stay above the pre-COVID level, says economist Michael Reid of RBC Capital Markets. That’s especially the case in industries with large shares of workers who are 55 and older. “It’s really going to increase demand" for workers and add to wage hikes that companies typically pass on to consumers through higher prices, he says. How many Americans retire each year - Through the first five months of the year, there have been about 900,000 retirements in the U.S., a pace that Reid expects to yield a record 1.7 million to 2.1 million for the entire year. The figures are based on Social Security Administration data on the number of people claiming benefits for the first time. By comparison, retirements averaged 1 million to 1.3 million from 2010 through 2019 before ramping up to about 1.6 million last year, RBC and Social Security figures show. Although COVID-19 pandemic prompted many workers to retire early, nearly 500,000 people delayed retirement as the pandemic shrank their income or nest eggs, and there's ample evidence suggesting retirement is becoming an unattainable luxury for some. Still, many people who put off retirement during the pandemic are making the move now, further stoking the wave. How many people are added to the labor force every year? - Meanwhile, the arrival of new entrants into the workforce – most of them recent high school or college grads – isn’t keeping pace. In May, there were 2.8 retirees for each unemployed entrant, the most on record and a ratio that has steadily climbed from about 1 to 1 the past 15 years, according to RBC. A big reason: Generation Z (ages 12 to 27) is far smaller than the baby boomers Millions of Baby Boomers have been retiring each year since the first members of this generational group (born between 1946 and 1964) became eligible for Social Security benefits in 2008.