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The Retirement Wave

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Current economic conditions are having an impact on retirements as well. Social Security statistics show a 23% spike in applications for early retirements since last year. That spike seems to be related to early retirement claims from laid-off seniors who can’t find other jobs.

The changing face of America

But the bigger picture shows that as the “baby boom” generation approaches retirement, the demographic profile of the U.S. workforce will undergo a substantial shift. A recent study from the Congressional Research Service shows that large number of older workers will be joined by relatively few new entrants to the labor force. According to the Census Bureau, there will be 204 million Americans aged 25 or older in 2010. By 2030, this number will increase by 23% to more than 251 million.

Most of the growth will occur among people aged 65 and older.

The Census Bureau estimates that while the number of people between the ages of 25 and 64 will increase by 15.5 million (9.4%) between 2010 and 2030, the number of people aged 65 and older is projected to grow by 31.7 million, or 79.2%.

As these changes begin to take hold in the nation’s demographic profile, coupled with the reality that older workers want to stay on the job longer, the traditional retirement paradigm begins to change too. The shift in the workforce is evolving retirement trends. Projections, including those made by the Office of Personnel Management, are having trouble keeping up with the phenomenon.

As Peter Orszag, Director of the Office of Management and Budget recently wrote in a blog post: for a variety of reasons including the stubbornly high unemployment rate and current economic conditions, very simply, older workers are forgoing retirement and working longer.

Even workers in the Federal Government, who arguably have one of the best retirement plans in the country, seem to be taking part in this developing trend.

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