More US workers aged 55+ retire amid rising stocks — CNBC
In the United States, workers aged 55 and older are rapidly leaving the labor market amid the stock market's rise, CNBC reports. Economists link this trend, in particular, to the wealth effect: higher stock prices have increased the value of investment and retirement accounts held by people approaching retirement age.
According to the US Bureau of Labor Statistics, since August 2024, the labor force participation rate among people aged 55 and older has fallen from 38.6% to 37.2%. The labor force includes employed people and unemployed people who are looking for work.
Asset growth and retirement
Bank of America economists Stephen Juneau and Aditya Bhave called the process a “stock-fueled retirement party.” In their view, the strength of the stock market partly explains the decline in labor force participation among older workers.
The S&P 500 index, including reinvested dividends, rose by 26% in 2023, 25% in 2024, and 18% in 2025. Since the beginning of 2026, as of early Monday, the index has gained about 16%.
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According to the Federal Reserve, in the second quarter of 2026, the wealth of US households and nonprofit organizations increased by $12.8 trillion, to $195.9 trillion. As CNBC notes based on Federal Reserve data, this was the largest quarterly increase in the indicator since tracking began in 2000.
Capital Economics economist Thomas Ryan said that wealth gains, including in 401(k)-type accounts, may have made it easier for many people to decide to retire early. At the same time, financial advisers generally recommend gradually reducing the share of stocks in a portfolio before retirement, although a typical 65-year-old investor may still hold about half of their assets in stocks.
Risks for the labor market
Economists also point to a demographic factor: an increasing number of baby boomers are reaching the age of 65. According to RBC Chief Economist Michael Reid, early retirement programs for federal workers and Microsoft's program for employees in the United States may also have affected the labor force participation rate.
The departure of older workers from the labor market creates opportunities for job seekers and new market entrants, which economists estimate has helped keep unemployment relatively low. If the stock market begins to decline, some people may postpone retirement or return to work. Economists believe this could reduce labor market churn and put pressure on the unemployment rate, which stood at 4.1%.
