Older Workers Have Left the US Labor Force

A rise in stock market wealth has enabled many Americans aged 55 and older to retire earlier than previously planned.

Updated on Oct. 7, 2026 in Employment

Older Workers Have Left the US Labor Force

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The United States labor force decreased to 170 million workers in September 2026, dropping from a peak of 171 million in late 2025. This decline is largely driven by older workers exiting the workforce to rely on significant gains in their investment portfolios.

Why it matters

Soaring stock market valuations have provided older Americans with the financial security needed to retire prematurely. While workforce participation among prime-age workers remains stable, the exit of the 55-plus demographic is actively reshaping the total labor supply.

The labor force participation rate sat at 62% in September, with workers aged 55 and older holding $51.5 trillion in stock and mutual fund assets as of the second quarter of 2026. The S&P 500 has climbed 140% since the start of 2020.

The players

Allianz

Allianz is a global financial services company that provides insurance and asset management services to millions of customers worldwide.

The details

An Allianz survey revealed that 42% of Americans retired earlier than they had originally intended, with 21% of those retirees attributing their decision to unexpected job loss. Older workers currently account for the majority of the labor force reduction observed over the past six years.

The S&P 500 began its current bull market in early 2020.
The US workforce size reached its peak of 171 million in late 2025.
Older Americans held $51.5 trillion in stock assets during Q2 2026.
The US workforce fell to 170 million with a 62% participation rate in September 2026.

Macro View

This contraction in the workforce mirrors shifts seen during the post-World War II retirement boom, though it represents a unique divergence driven by record-high equity valuations. The current trajectory suggests a structural shift in labor supply that mirrors historical cycles of aging demographics.

The mass exit of older, experienced workers may lead to upward pressure on wages as employers compete for a smaller pool of talent. Families should prepare for potential labor shortages in key sectors and ensure their personal retirement plans remain resilient to market volatility.

The takeaway

The surge in stock market wealth has created a new standard for early retirement that is fundamentally altering the American workforce. Employees should focus on diversifying their retirement savings to ensure they are not solely dependent on market-sensitive assets.