As millions of Baby Boomers join others in retirement, income growth will provide less oomph for the economy in the next 20 years. The labor force that remains will include a growing share of workers with less earning power.
Together, the trends will act as a brake on consumer spending, which makes us 70% of gross domestic product of the U.S.
Baby Boomers started turning 65 in 2011, and for the next 16 years, about 10,000 each day will hit the age long associated with retirement, according to the Pew Research Center. The demographic shift will reduce the growth of median income by 0.5% a year through 2030.
The slowdown in income growth will be another drag on household budgets that took a hit during the recession. Median household income dropped 8.3%, to $51,107, in 2012 from the end of 2007, while the poverty rate remains 2.5% higher than in 2007, the Census Bureau reported.
As more workers retire and the pool of active ones grows less quickly, smaller advances in payrolls will be enough to hold the unemployment rate steady.Books for Boomers: Reviews & Coaching Tips (FREE)
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