How has the prevalence of bridge jobs, phased retirement, and re-entry changed over the past two decades and what are the key determinants of these diverse retirement patterns?  This paper examines the prevalence and determinants of various paths to retirement using three cohorts of older Americans from the Health and Retirement Study (HRS).  The three cohorts (HRS Core (born 1931–1941), War Babies (born 1942–1947), and Early Boomers (born 1948–1953)) have each faced very different economic circumstances when approaching traditional retirement ages.  Most of the HRS Core, for example, reached traditional retirement ages in the mid- and late-1990s, an extended period of low unemployment and strong economic growth.  The youngest of the HRS Core, in contrast, faced a recession, albeit a short-lived one, in the early 2000s, just when they were on the cusp of retirement.  The HRS War Babies, by and large, faced robust economic growth in their late 50s and early 60s, only to reach retirement in the face of the Great Recession.  The Early Boomers had different experiences than both the HRS Core and the War Babies – they had to deal with the Great Recession at a time when asset accumulation was crucial.  

With such different retirement environments, it would not be surprising to see different outcomes with respect to retirement patterns.  Older Americans today rely on privately-held assets more so than retirees in the past, largely due to the shift away from defined-benefit pension plans toward defined-contribution plans over the past 30 years.  This do-it-yourself approach to retirement income, where individuals manage a large fraction of their retirement assets, leaves many older Americans vulnerable to market fluctuations.  The result is that a market crash can greatly alter the need for additional work later in life.  Some recent research has shown that the timing of retirement among Americans may not be affected by short-term market declines because (1) relatively few older Americans hold substantial wealth in stock, (2) relatively few older Americans are “underwater” with respect to their houses, and (3) relatively few older Americans experienced multiple adverse events when approaching retirement.  While this may be true, the impact of the broader macroeconomy on retirement patterns, such as bridge job behavior, phased retirement, and re-entry has largely been unexplored. 

The BLS recently estimated that the percentage of the workforce aged 55 and older will increase from around 20 percent today to more than 25 percent in just ten years.  The way these older workers exit the labor force will have profound implications for the financial solvency of government programs, such as Social Security and Medicare, for employers, who will need to adjust to the needs of older workers, and for employees themselves, who are increasingly on their own when it comes to providing retirement income.  This paper enhances our understanding of the diverse pathways that older Americans take when exiting the labor force, and this understanding will help assist those who are considering ways to alleviate the strains of an aging population.