The “silver tsunami,” or the mass retirement of baby boomers, could bring profound changes to our workplaces and our incomes. Currently, baby boomers (those aged 65 and older) make up about 17% of the U.S. population. As the population ages, more and more baby boomers are retiring.
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Baby Boomers are retiring in droves, with 2024 setting a new record for the number of retirements so far. This year will be the first time that Gen X will overtake Baby Boomers as a share of the workforce. Recent trends suggest that these changes will be short-lived, but ultimately, only time will tell how mass retirements will impact the economy.
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Longer life spans and lower birth rates
Until very recently, baby boomers made up the majority of the workforce.
According to the Wall Street Journal, fewer young people are entering the workforce because there are simply fewer of them than there were baby boomers: Birth rates have fallen sharply since the postwar boom of the 1950s and 1960s.
Low birth rates and a high number of retirees are putting a strain on Social Security.
“This is a ripple effect that could essentially become a senior citizen-driven recession,” he said in a video released by The Wall Street Journal.
Mass retirements could have potentially negative effects on the economy unless Congress makes appropriate changes to Social Security.
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Increased working hours for retirees
Due to rising life expectancies, many baby boomers are finding themselves continuing to work past 65, what many consider to be the standard retirement age.
“When people are inadequately saved for retirement, the need for additional income is a major driver of their decision to work beyond traditional retirement age,” Forbes said in an article.
Baby Boomers are fearful of running out of savings, and with life expectancy rising rapidly as mentioned above, it's clear that some people won't be able to survive on their 401(k) and Social Security benefits alone.
This could have an impact on the workforce, as some people of retirement age may choose to continue working, potentially eliminating job opportunities for younger millennials and Gen Z.
Ultimately, the retirement of large numbers of people will create economic changes over the next few years.
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This article originally appeared on GOBankingRates.com: 10,000 Baby Boomers Retire Every Day – What Changes Will Come to Your Banking and Finances?
