New Retirement Research (April 29 2019)

Robert Powell, CFP®

It's not your parents' retirement: Do the retirement patterns of the early and middle boomers resemble those of older cohorts? One well-documented finding from the retirement literature is that most Americans with career jobs later in life exit the labor force gradually, in stages. In the report from the U.S. Bureau of Labor Statistics: Retirement Patterns of the Early and Middle Baby Boomers, authors Kevin E. Cahill, Michael D. Giandrea, and Joseph F. Quinn write that these stages include phased retirement, bridge employment, and labor market reentry. Phased retirement entails a reduction in hours on one's current job; bridge employment refers to a job with a new employer between career employment and complete labor force exit; and reentry refers to a return to the labor force following an initial period of retirement. Bridge employment has been the most common form of gradual retirement during the past three decades, a time when more older Americans are staying in the labor force later in life. A key question for policymakers is whether the retirement patterns of the Baby Boomers will resemble those of the cohorts that preceded them. Researchers address this question using data on four cohorts of older Americans from the Health and Retirement Study (HRS), a nationally-representative longitudinal survey that began in 1992, with updates every two years since then. They find that the boomers also are retiring in nontraditional fashions, as their predecessors did, albeit with a later start to their transitions from career employment. This finding sheds light on how retirement pathways are emerging as societal aging accelerates.

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