Retirements Increased During the COVID-19 Pandemic: Who Retired and Why?

March 30, 2022

This 11-minute podcast was released March 30, 2022, as a part of the Timely Topics podcast series.

From left: Lowell Ricketts, a data scientist at the Institute for Economic Equity, and Miguel Faria-E-Castro, a St. Louis Fed research economist

“During the pandemic, a lot of people had reasons to retire and the way that markets evolved allowed them to retire,” says Miguel Faria-E-Castro, a research economist at the Federal Reserve Bank of St. Louis. He is joined by Lowell Ricketts, a data scientist at the Institute for Economic Equity, to discuss the “Great Retirement,” how COVID-19 may have led more members of the workforce to retire and why they retired. Faria-E-Castro and Ricketts talk with Maria Hasenstab, a media relations coordinator at the St. Louis Fed, about:

  • How many people retired beyond what was predicted? There were about 2.6 million excess retirees than predicted during the pandemic.
  • Who retired during the pandemic? Demographically, the profile of a retiree during the pandemic was likely a white woman, over the age of 65, lacking a college degree and married.
  • Why did so many more people retire during the pandemic? Health and safety concerns, caregiving needs, rising asset values and other factors increased the number of retirements during the pandemic.


Miguel Faria-E-Castro: During the pandemic, a lot of people had reasons to retire and the way that markets evolved allowed them to retire.

Maria Hasenstab: Welcome to the St. Louis Fed’s Timely Topics podcast series where we interview subject matter experts about their research. I’m Maria Hasenstab, your host. Retirement is something we’ve been hearing a lot about in the news recently, specifically how COVID-19 may have led to more members of the workforce retiring. In this episode, we’re going to dive deeper into what has been called the “Great Retirement” or the “Great Resignation.”  To find out how many people are retiring and who these retirees are, we are joined by two experts from the Federal Reserve Bank of St. Louis. Miguel Faria-E-Castro, a research economist, and Lowell Ricketts, a data scientist at the Institute for Economic Equity. Thank you both for joining me today.

Miguel Faria-E-Castro: Thank you.

Lowell Ricketts: Thanks for having us.

Hasenstab: Miguel, what did you discover in your research about the number of early retirements?

Faria-E-Castro: So as a research economist, it’s my job to advise the president of the St. Louis Fed in the matters of economic and monetary policy, and one thing that has been widely discussed in the press and among economics, etcetera, is the fact that in spite of the very fast and strong pandemic recovery, many labor market indicators were still way below their pre-pandemic levels, namely the labor force participation rate. So this led me to dig a little bit deeper into the data, and what I found is that the number of retirees in the United States increased way beyond what normal demographic trends would predict. By this what I mean is that we are currently witnessing the retirement of the Baby Boomer generation of the United States so it’s normal that the percentage of retirees in the West would be increasing, but what I find is that once you account for those demographic trends, the actual increase of percentage of retirees in the United States was actually way above what those trends would predict. And actually, I find that there were about 2.6 million excess retirees so on top on what those trends would predict, and that there’s many reasons why people are retiring during COVID. There’s the fact that older people tend to be more susceptible to severe illness from COVID. There’s the fact that many of these older workers had to care for loved ones who used to be in daycare institutions that were now subject to lockdowns, and there’s also the fact that asset values were rising very rapidly during the COVID pandemic, which might have influenced the value of pension and retirement accounts.

Hasenstab: Wow. 2.6 million additional retirees. Lowell, tell us a little bit more about who these retirees are.

Ricketts: That’s a great question, Maria, and something that Bill Rodgers and I, both at the Institute for Economic Equity, incorporated into a monthly look at the labor market recovery, and I think as Miguel said that there’s just this sense of where are the workers?  We’ve seen help wanted signs everywhere and we wanted to know what the typical profile of a retiree was, demographically speaking, and so we conducted a statistical analysis looking at groups over the age of 65, over the age of 75, and we tried to understand what were the factors, demographically speaking, that were predictive of retirement. And so we actually came up with a typical retiree. Call her Linda. Over the age of 65, she’s a white woman, she lacks a college degree, she maybe served in the Armed Forces and is thus a veteran, and she’s married. And so Linda, all these factors independently were predictive of being retired in today’s labor market.

Hasenstab: So Linda’s really interesting. How do some of the other vulnerable groups that the Institute covers play into this retirement?  People of color, people with disabilities, younger workers, older workers. Where are we seeing a lot of the retirements?

Ricketts: That’s a great follow-up, Maria, and I think it’s important to look at some of the contrast, right. Linda’s this composite. These are independently each factors that are likely to predict retirement, but you look at some of the other groups, right. Black and Hispanic workers were more likely to still be working at these older ages. It’s capturing some of the financial means. What we found at the Institute’s work and work from its preceding Center for Household Financial Stability is a profound racial wealth gap, right, and so what allows folks to retire it’s having some of the personal savings to fall back on. And the racial wealth gap is suggestive that some of these workers just don’t have the retirement savings to exit the labor force and are still working, and in this case during the pandemic, in a labor market that exposes them to increased risk. This is the group, as Miguel pointed out, that is bearing the brunt of the lethal effects of COVID-19 and have been throughout much of the pandemic, so I think in this comparison of Linda, there are folks that have the means but also groups that don’t have the means to really pursue retirement, and that’s being captured in some of our data.

Hasenstab: So Linda has the means because being a veteran, having a spouse are often contributing factors to wealth building?

Ricketts: Hm-hmm [affirmative]. Yeah, and the veteran status isn’t a huge predictor. The biggest one is marital status, either marriage or divorced, and that’s just coming out to optimal allocation of household resources over time.

Hasenstab: Miguel, how permanent are these early retirements likely to be?

Faria-E-Castro: That’s a great question. Going to back Lowell and Bill’s work, my work on trying to understand who’s retiring or not, I took a different approach to it. I tried to dig deeper into the things that he just discussed about having the means to be able to retire. My analysis was based on these standard Econ-101 fact that’s called the Wealth Effect. It’s a very simple force, but it’s very well documented and it just says that when people are wealthier, everything else constant, they prefer to work less. And what we saw during the pandemic was in spite of very dire economic conditions in many respects, asset valuations were at historically high levels, so we have in February 2020 and late 2021, cumulative real returns on the stock market, for example, were over 30%. Cumulative returns on housing were over 20%. This was a very interesting situation where many real economic indicators were not doing that well, but as evaluations were very high, and these are facts the value of pension and retirement accounts, and what might have happened during the pandemic is that a lot of people had reasons to retire. The fact that they didn’t want to get sick and the fact that they had to care for loved ones, and on top of that, the way that markets evolved allowed them to retire because all of those very high asset returns lead to historically high increases in net worth, on average, for U.S. households.

Hasenstab: If these asset valuations change, how could that affect those who have recently retired?

Faria-E-Castro: In principle, these Wealth Effect it works both ways, so it works both when asset valuations go up and when they go down, but it’s hard to say at this point.

Hasenstab: So some of these recent retirees could re-enter the workforce?

Faria-E-Castro: Yes, they could.

Ricketts: That’s a really good point, Miguel, and I think a lot of folks out there think of retirement as this permanent state in which you leave your job and you take up knitting and playing golf full time, but that’s not actually the case. Two researchers at the Kansas City Fed called out this flow back from retirement into the labor force where retirees pick up new jobs, and that might be surprising to folks. It’s not just a binary zero or one you’re out of the work of the workforce or you’re in—folks come back. But what they found in their research is very much this lower rate of returns to the labor force, and I think Miguel highlighted this wealth channel where a lot of folks are more comfortable. They’re going to be able to rely on some of their assets, but also the Kansas City Fed researchers pointed out that there could be fears of COVID-19 in the labor force, right?  Again, this is a group that really is at risk of serious complications from a case of COVID-19 and although the vaccination efforts have helped to address some of that heightened risk, it’s still a factor weighing on folk’s minds. In the blog article that Bill and I wrote, we actually looked at for those retirees or those individuals over 65 that are in the labor force versus out and retired, what’s the incidence of anxiety, and we found a significant increase for those still working at that age, significant increase levels of anxiety. So this is very much a factor, I think, for a lot of retirees when they’re thinking about returning to the labor force.

Hasenstab: Well those mental health concerns that you mentioned are real. I wanted to go back to some of your other core work at the Institute where you look at vulnerable groups. People of color historically have had higher unemployment rates. Could this Great Resignation affect that?

Ricketts: That’s a great question, Maria. I think there’s been a hope leading into the pandemic, confronted with this historic shock and loss of employment coupled with calls for racial justice and addressing systemic barriers for workers of color in the U.S. I think there’s this hope that we could close these age-old gaps, right. The gap between the employment outcomes of white workers versus Black and Hispanic workers, for example. This hope that we could achieve economic equity within the labor market, but what we’re seeing now is though all groups have had a relatively strong labor market recovery in which many of the jobs lost have been regained, we’re still seeing those gaps, frustratingly. And it looks like more intentional efforts to address systemic barriers in the labor market will be needed if we are to truly take advantage of this crisis and achieve better outcomes for workers of color in the long run.

Hasenstab: So still a lot to unfold with the labor market here. Lowell, Miguel, I want to thank you both so much for your time. You’ve both published really interesting research on these topics, so for listeners who want to take a deeper dive, you can visit You can also find all of our Timely Topics podcasts on or your favorite podcast app. Thank you so much for your time today.

Ricketts: Thank you.

Faria-E-Castro: Thanks for having us.

Economists and experts talk about their research, topics in the news and issues related to the Fed. Views expressed are not necessarily those of the St. Louis Fed or the Federal Reserve System.

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