The retirement world will become a little more crowded as the ADP Retirement Research Institute found that 18 percent of the current work force might retire within the next five years.
The findings are a good prognosticator to show that the bulk of the Baby Boomer generation will slowly phase out of the workforce. The report covered six industries including public administration, health care, education, retail, manufacturing and hospitality. ADP reported that these industries make up more than 60 percent of America's workforce.
The study, "Age and Retirement Benchmarks: Key Analytics That Drive Human Capital Management," found that the hospitality industry was the lowest at 9 percent and public administration was the highest at 28 percent. The study assessed that 61 was the average age of retirement.
"While there is no guarantee that everyone who reaches the average retirement age will actually stop working, our research indicates several industries could be facing a significant loss of skilled talent over the next five years," said Ahu Yildirmaz, senior director of market insights, at ADP Research Institute. "Retirement data provides a critical glimpse into the future of a company's work force."
Economy is a contributing factor
The ongoing situation with the economy and rise in life expectancy has played a part in people deciding if they will work through the average retirement age, but the study showed that each industry is different. For instance, the study found that the public administration and health care industries has average ages of 47 and 43, respectively. The hospitality and retail service businesses average ages are 34 and 36, so they will retire at a much older age.
Money does play a part in deciding what age one will retire at, but that is starting to become less of a worry for some. The Employee Benefit Research Institute found in its research that income distribution plays a role in why people retire.
"Those in the bottom half of income distribution did not experience any drop in income after they reached 65," the study showed. "In fact, due to Social Security, the bottom-income quartile actually experienced an increase in average household income after 65 during the study period. For the top income quartile, the large drops in labor and capital income were not offset by the increase in Social Security or pension/annuity income."
How the economy adjusts and reacts in the future will be partly responsible why people retire. It will all depend on the industry you work in and how you view your economic situation.
Although the ADP study is useful to the working class, its cautions businesses to look at retirement trends to better help them improve and add to their companies.
"Businesses will want to assess how their workforces compare to the averages and consider strategies for recruitment and training in order to replace the significant loss of knowledge, experience and company culture that can be expected," Yildirmaz said.
