May 06, 2021
Approximately 10,000 Baby Boomers (born 1946-1964) retire each day, though that number accelerated in 2020. There are 71.6 million Boomers. Gen X is 1965-1979/80 with only 65.2 million.
There has been some concern about the impact on the economy of the Boomers retiring and the impact of the smaller Gen X population. It reduces the labor force. Growth in the economy over the past couple of decades slowed as the work force declined.
However, some of the Millennials (1981-1996) are reaching middle age and their peak earning years. Just as Boomers changed much of society so are Millennials.
According to a study by Wells Fargo, nearly one-third of Gen X and Millennial women are the primary breadwinner in their households. This may not sound like a lot but it is about 1 ½ times more than the Boomer generation.
“The economic recovery from COVID-19 will be heavily influenced by women as the next generation continues to increase their earnings potential,” said Veronica Willis, Investment strategy analyst with the Wells Fargo Investment Institute.
While some economists believe the large number of Boomers retiring will be a “drag” on the economy, Josh Jamner of ClearBridge investments believes the opposite. With the larger Millennial population moving into their peak earnings years, he believes they will lift economic activity over the next couple of decades as opposed to being a drag on the economy.