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Americans Say They’re Now Less Likely to Work Far Into Their 60s

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What You Need to Know

  • The share of respondents to a New York Fed survey expecting to work past the age of 62 dropped to its lowest level since 2014.
  • The numbers saying they’re likely to be employed when they’re older than 67 also dropped.
  • More than 1 million older workers have left the labor market since March 2020.

Americans say it’s increasingly unlikely that they’ll work deep into their 60s, according to new data from the Federal Reserve Bank of New York.

The share of respondents expecting to work past the age of 62 dropped to 50.1% in the New York Fed’s July labor-market survey, from 51.9% a year earlier — the lowest on record in a study that’s been conducted since 2014.

The numbers saying they’re likely to be employed when they’re older than 67 also dropped (see chart below), to 32.4% from 34.1%.

chart showing retirement expectations Retirement Expectations. (Chart: Bloomberg)

The data reinforces other research pointing to a wave of early retirements triggered by the pandemic.

More than 1 million older workers have left the labor market since March 2020. Some Americans have been rethinking their priorities after the trauma of COVID-19 — with a bigger nest egg to fall back on, thanks to exuberant financial markets.

For others the withdrawal may be involuntary, driven by a lack of employment prospects.

It’s adding up to a dramatic shift in a labor market where job growth (see chart below) has been dominated by older workers over the last two decades.

chart showing how older workers account for a percent of jobs created Workplace Shift. Chart: Bloomberg)

As many older Americans eye the exit, they’re also holding tighter to the jobs they have.

The so-called “reservation wage’ — the lowest salary that respondents would be willing to accept to switch to a new job — rose sharply for workers age 45 and over, according to the New York Fed report. It increased by some 11% (see chart below) in the year through July — roughly double the rate of inflation.

Annual ‘reservation wage’ increase. (Chart: Bloomberg)

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