62 is the new 65!

 

More than once in this space, I have chronicled the quantum surge in advertisements for job openings that I have seen both in my neighborhood and beyond. Last week, the monthly jobs report stated that job openings rose to 10.9 million– a fifth consecutive record high. Conversely, job creation totaled just 235,000 payrolls in August missing the median estimate of 733,000 added jobs.

As it turns out, it’s not just the Millennials, Gen X/Y/Z who are bypassing employment opportunities, but older workers as well. Specifically, those who have reached the near retirement age of 62. Or rather the new retirement age.

Recently the Federal Reserve Bank of New York conducted a survey of some 1,300 households and discovered that the chances of adults expected to work beyond the age of 62 hovered at roughly 50 percent – the smallest share since the Fed began the survey some seven years ago. The percent of adults who expect to work beyond 67 dipped to a record low 32.4 percent.

According to the Bureau of Labor Statistics, more than 1 million “older” workers have exited the workforce since the inception of the COVID-19 pandemic. An additional 1.5 million cited the coronavirus as the primary reason they remained out to the labor force during the month of August.

Anthony Klotz, an associate professor of Management at Mays Business School, Texas A&M University, has coined the now oft-repeated sobriquet the “Great Resignation.” People, particularly those older workers may no longer feel compelled to remain in their current jobs and subsequently leave.

Also, with the market at record highs, many of those in their late 50s and early 60s may have discovered that they had fortunately met their retirement goals via successful investing.

As I mentioned in a previous blog, Fidelity Investments said that the number of 401(k) and IRAs with at least $1million had spiked to a record 754,000 by the second quarter of 2021 — a 75 per cent increase on the previous year.

On average for all workers with retirement accounts, a 401(k) balance is up 24 per cent to $129,300 from the year before, and the average IRA balance is up 21 per cent to $134,900.

So many might question why return to an uncertain work environment when you have the resources to retire now? Good question. Sadly, that’s not one that I must currently address at this moment but hopefully, someday.

So, employers will have to mine ways to get the younger workers to pick up the void left by the older worker exodus. Or as someone suggested, have robots pick up the slack. That being said, I think it would be somewhat strange to be greeted by anything other than a live person at my local Wal-Mart.