“The Booming Stock Market Is Helping Many Retire Early”

Interesting. Jives with what I’ve seen with a lot of colleagues.(sorry, had trouble getting a link)

Excerpt from Barron’s:

“…But it seems that strong gains in asset prices have lifted the wealth of many older workers sufficiently to allow them to attain their goal of retirement. With the value of their securities portfolios and homes having been levitated by the effects of strongly stimulative monetary and fiscal policies to fight the effects of the Covid-19 pandemic, the labor-force participation rate of those over 65 has fallen, and doesn’t look likely to get up again. Meanwhile, labor-force participation among those in the so-called “prime” working years has recovered and exceeded prepandemic rates.

That’s the finding of economists Miguel Faria-e-Castro and Samuel Jordan-Wood, writing in the current issue of the Federal Reserve Bank of St. Louis Review. There were 3.27 million “excess retirees” as of December 2022, accounting for much of the 3.73 million “missing workers” over age 16 relative to the prepandemic peak of February 2020.

While many folks find they have to retire sooner than planned and feel a financial pinch, Faria-e-Castro and Jordan-Wood find that “booming asset returns in 2020-21 help explain” a significant number of dropouts from the workforce, especially for those near retirement. The S&P 500
SPX index returned over 35% from December 2019 to December 2021 in real terms (adjusted for inflation) while housing’s real return was close to 20% in the period…”