Older Americans make up a growing share of the workforce, a trend that dates to the 1990s. But the employment rate among older Americans has fallen in recent years.
The share of Americans 55 and older participating in the labor force declined from 39.2% in February 2022 to 36.9% in July 2026, according to the Bureau of Labor Statistics.
Economists at Bank of America have suggested that a booming stock market may be one reason more older Americans are retiring. “We think the strength of the equity market is partly to blame,” they wrote in an Aug. 11 note.
Is the Stock Market Encouraging Early Retirement?
The S&P 500 has more than tripled since its low point during the 2020 COVID-19 downturn. James Cox, managing partner at Harris Financial Group, said he sees more people with $1 million in their 401(k)s than ever. Reaching that level can make it easier for some workers to leave a paycheck behind, he said.
Bank of America’s analysis pointed to a more than 35% increase in the S&P 500 over the past two years. The economists described their explanation as a theory, however, and other factors may be at work.
An Aging Workforce May Explain Some of the Decline
The share of workers 55 and older rose from 15% to 23% over the past 20 years, the Government Accountability Office reported in March 2026. Pew Research reported in 2023 that the number of older workers had nearly quadrupled since the mid-1980s.
But the 55-and-older group spans a wide range of ages, and the population itself is getting older. The median age in the United States rose from 35.6 in 2001 to 39.4 in 2025, according to the Census Bureau. As baby boomers age, labor-force participation in this broad group may decline even if people ages 55 to 64 keep working at similar rates, economists said.
Some economists also question whether the drop is as large as the data suggest. The Bureau of Labor Statistics has noted falling response rates to its surveys, which could skew the results if people who don’t respond differ from those who do.
“The people who are not responding to the survey are different from the people who are responding,” said Monique Morrissey, a senior economist at the Economic Policy Institute. Low-income Americans, for example, are less likely to answer the surveys.
Many Americans Retire Earlier Than Planned
The 2026 Annual Retirement Study by Allianz Life found that 42% of retired Americans left work earlier than they had planned. Among them, 21% cited positive financial reasons, including strong stock-market returns; 30% said health issues prompted their retirement, and 21% said they unexpectedly lost their jobs.
A market downturn could reverse some early retirements. When stocks and bonds fell sharply in 2022, labor-force participation among people 55 and older ticked up as some delayed retirement or returned to work.
A downturn can be especially difficult for people nearing or just entering retirement. “You suddenly are dealing with less than you expected to have,” said Kelly LaVigne, vice president of consumer insights at Allianz Life. “And you’re not working anymore.”
Reporting by Daniel de Visé, USA TODAY. USA TODAY Network via Reuters Connect.
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