May 17, 2021
Have you heard anyone say, “I am ready to retire!” If this phrase is unfamiliar to you, the odds are that you are not living in the United States of Retirement. I have been overwhelmed by the recent statistics, which suggest that a massive portion of the workforce wants to join the ranks of retirees.
Here are some examples of the data:
- Over one-third of all physicians in America are over age sixty.
- 37% of private school teachers and 30% of public school teachers are over age fifty.
- Over the next five years, we will need 1.1 million truck drivers to fill the positions of retiring drivers.
- The City of New York recently announced that the number of police officers taking retirement was up 75% over the previous year, at 5,300.
- A national survey conducted over the last ten years found that small business owners wanting to sell their businesses and retire increased from 4% to 8%. The figures were even higher for those businesses with revenues over $5 million. Among this group, the wish to retire climbed from 10% to 21%!
So, why this rush? The aging of the Baby Boomer is one obvious answer. There are at least four other current events that are helping accelerate this retirement renaissance.
First, the Covid 19 pandemic has caused many to reexamine their priorities. Lockdown has given many the chance to quietly reflect on the question of what to do with what time we have remaining.
Second, the stock market is trading at an all-time high. Retirees see the growth in their investments and ask if not now, then when?
Third, the real estate market is red hot. Inventory is extremely low, and there are multiple interested buyers for the same homes, so houses are frequently trading at prices above list. Many potential retirees see an opportunity to unlock the value of their urban homes and find a simpler, less crowded lifestyle. And yes, Amazon Prime delivers virtually everywhere.
Fourth, everyone expects tax rates to increase. This applies to long-term capital gains tax, estate taxes, real estate, and, for some at least, income taxes. Only time will tell when and how much. Business owners, and owners of low-basis stock, are all thinking through what to do next, and the list of options often includes retirement.
Retiring Americans are creating many opportunities. If you are mobile and young, the job of your choice may well be out there. We are seeing a ton of people leave the workforce while at the same time the demand for new workers is unlike anything seen in years. These are exciting times as our workforce transitions. It is a win-win for both the older and the younger generations!