Baby Boomers, born between 1946 and 1964, make up 28% of the United States population, making them one of the largest living adult generations, second to millennials. 10,000 Baby Boomers reach retirement age every day, meaning radical changes to the job market have already begun.
How will this affect the job market? Baby Boomers' retirement will affect many industries, particularly the IT and technology industries. This demographic has become less interested and obligated to work long hours, partially due to their high corporate rankings and because they are less defined by their career than younger generations who are newer to the workforce.
The following information describes Boomer retirement trends, why boomers are not retiring, commonly held positions by this generation, likely economic changes, and Boomer statistics.
How many Baby Boomers are retiring in 2022?
According to Pew Research Center, the rate of retirement for Boomers has accelerated since COVID-19 began. Nearly 29 million Boomers retired in 2020, three million more than in 2019. Seventy-five million Boomers are expected to retire by 2030, paving the way for what is now called "The Great Retirement," which may surpass The Great Resignation as the most significant hiring trend for 2022.
“The Great Retirement” is an unprecedented flood of retirees exiting the workforce earlier than planned. This event was triggered by the pandemic and heavily involved Boomers. Whether it is to enjoy life, health concerns, or a changing work environment, the workforce in recent years has seen an uptick in retirement. By the fall of 2020, according to the PEW Research Center, almost 30 million Boomers had retired, an increase of 213% from the previous year.
One in four workers in the United States is a Boomer, amounting to 41 million in total. The mass retirement likely will lead to an even wider workforce gap as companies will need to fill positions made available after the Boomers' retirement. As mentioned above, these workers generally hold higher positions, making the need for recruiters even more critical. Working with a recruitment agency can help ensure that jobs are filled by qualified candidates, facilitating an easy transition. Click here to learn more about how working with a recruiter will revolutionize your hiring process.
To avoid the workforce gap, employers can take steps involving new talent.
- Workplace flexibility: Gen Z and Millennial workers often prefer remote work. This stems from several reasons, including being closer to their family throughout the day, time saved through remote work, more opportunities, and acting as caregivers for family members. Whatever the reason, offering greater workplace flexibility and measuring performance on results, not hours worked alone, helps retain valuable employees.
- Close skills gaps with reskilling and upskilling: Generations of younger workers do not have the years of experience that retiring Boomers hold. Rather than discounting younger talent for lack of knowledge, train them on the skills needed to perform well in your company. If your company does not have a formal training program, they can enroll in online courses that provide training at no cost.
- Mentorship: For young talent, specifically those seeking their first job after graduation, a company must provide more than just a salary. Career progression is driven by feedback and advice from mature employees, alongside guidance for operating within your company. Emphasizing mentorship is crucial, especially as younger workers report wanting timely feedback and rank mentorship among the top three most important aspects of choosing where to work. Mentorship programs will not only attract top young talent but will keep them loyal to your company.
Why Won't Boomers retire?
There are several reasons why a portion of Boomers has not yet retired.
As more boomers approach retirement, there are fewer skilled workers to take their place. This is creating what is known as a "knowledge gap," as highly demanded workers and their skills are exiting the workforce quicker than new employees can receive the necessary training and experience to replace them.
Boomers have improved health and wellness compared to previous generations. With innovation and progress in the health industry and a movement toward greater fitness and overall health, Boomers are living a healthier lifestyle than before. This has encouraged the generation to continue working and find more ways to stay productive.
Social security will not be available until age 67, meaning many Boomers will need to continue working to support themselves and their dependents. This, coupled with a lack of retirement savings, means Boomers will continue to work past retirement age. The median 401(k) balance of those aged 55-64 is $177,805, according to a report from Vanguard. According to the "4% rule" of retirement, this translates to $7,112 per year for retirement. Despite the additional income from social security, this is not nearly enough income for most retirees to sustain their lives. 45% of Boomers report having no savings for retirement at all.
Some Boomers take the generational motto, "Live to work," to an extreme. A 2013 Gallup poll on consumer and workplace behavior of Boomers asked at what age the generation planned to retire. 10% of respondents chose "Never" as their response.
What changes are expected for the economy?
After more Boomers retire, several changes to the economy are expected. Consumer spending will be affected, as retirees both produce less and consume/spend less money. The unemployment rate is historically low, but many people are still looking for jobs, specifically young talent. When Boomers retire, it will free up jobs for younger employees.
Boomers also spend more on their adult children than previous generations, as a substantial percentage of parents provide some financial support for their adult children. In February 2020, 47% of adults aged 18-29 resided with one or both of their parents. As of July 2020, that number increased to 52%, even surpassing the previous peak seen during the Great Depression. The most common area of assistance is student loans, and although this may be a debt of the past, the financial support provided by Boomers will likely slow down after retirement.
What industries do Boomers operate in?
Boomers thrive in the installation, transportation, and engineering industries. The generation is used to working with their hands and grew up before the internet. By analyzing which positions Boomers hold, we can better identify likely job openings in the next several years. Some of these common positions include:
- Installation technician: Installation technicians provide services related to computers/equipment. They install commercial and residential equipment, identify and solve problems, and assist customers. This is a hands-on position, which is ideal for Boomers.
- Consultant: Consultants are present industrywide and use their knowledge to advise companies. They work with businesses to produce short-term and long-term solutions, coach executives, solve problems, and assist in reorganization efforts. This can be a part-time or contractual career, making it ideal for this generation.
- Architect: Architects combine math skills with art to design new structures. They work as independent contractors or within a firm and generally need a bachelor's degree. Some architects work as an apprentice before working on their own.
- Real estate agent: Real estate agents assist in buying/selling properties. They work with clients to list their properties on the market, negotiate prices, and help process paperwork. Real estate agents complete rigorous training courses and pass a state exam to become licensed for the state they work within. This is a typical job for Boomers, some even taking the career up post-retirement.
Other areas of interest for Boomers
- Congress: Boomers make up 230 voting members (53%) in the House
- Senate: Boomers are the majority (68)
- Law firm leaders: By 2010, nearly 70% of law firm partners were Boomers
- Corporate executives
- Senior Vice President of sales and marketing: No matter the industry, the SVP of sales and marketing is responsible for developing marketing tactics and growing sales. This position often requires a degree and a history of related success in similar jobs. The median salary for this position is $208,500
- President and CEO: Presidents and CEOs of a company serve as the public face of the organization and oversee all reports. They provide strategic leadership to managers and may be asked to fill sales, marketing, finance, or other related roles depending on the company's size. They are also in charge of approving budgets and other organizational plans. The median salary for these positions is $183,200
- Medical industry
- General Surgeons: General surgeons operate on the body's major systems rather than specializing in a particular area. The median salary for this position is $285,900
- Chief Medical Officer: Chief medical officers usually oversee activities at hospitals or other healthcare provider locations. They track metrics on performance, safety, infection control, and service. They also manage directors, set up performance standards, and track compliance. The median salary for this position is $300,700
- Psychiatrist: Psychiatrists specialize in treating mental disorders. They earn medical degrees and can prescribe medication to patients. After earning an M.D or D.O., psychiatrists may generally practice or specialize in a specific area. The median salary for this position is $215,200
Baby Boomer statistics
- Maine and New Hampshire have the highest concentration of Boomers in the United States, around 36%.
- California, Texas, Georgia, Arizona, and Utah have the lowest concentration of Boomers in the United States.
- Boomers are twice as likely as millennials to start a new business, and 45% consider themselves entrepreneurs.
- They control more than ⅔ of the disposable income in the United States.
- Their spending power is expected to increase by $24 trillion by 2032
- They are more likely than any other generation to have attended college, and nearly ⅔ have a degree.
The above information highlights the key aspects and future trends of one of the most demanding working generations. Although "The Great Retirement" may be a daunting event continuing to approach the horizon, young talent is ready to be trained and fully integrated into the workforce. This transition can be better facilitated through workplace flexibility, reskilling, upskilling, and mentorship provided by those who may soon head toward retirement.
Written by Lauren Kemp
Lauren Kemp, Communications and Marketing Specialist at J2T, earned a Bachelor of Science in Business Management with a minor in Latin American studies and a Master of Science in Innovation and Management from Montana State University. Lauren hails from Montana and enjoys reading about the history of her home state. Her bucket-list items include touring the Biltmore Estate in Asheville, North Carolina, and taking an immersion trip to Chile to experience Latin American culture first-hand.
J2T is a recruiting and staffing firm that solely focuses on accounting and finance roles. J2T Flex facilitates all operational accounting needs, both direct hire and contract or contract-to-hire needs. On the direct hire side, J2T Recruiting specializes in senior positions starting at Sr. Accountant up through CFO in both direct hire and contract or contract-to-hire needs encompassing everything in the corporate accounting and finance organizational chart. J2T is a women-owned business exclusively serving the Colorado and Montana markets with the overarching goal to serve you in all areas of the hiring experience.