Fewer older Americans are working. Here's one likely reason

Older Americans make up an ever-larger share of the workforce, a trend that dates to the 1990s.

Over the past few years, however, the employment rate among older Americans has been falling.

The share of Americans ages 55 and over participating in the labor force dropped from 39.2% in February 2022 to 36.9% in July 2026, according to data from the federal Bureau of Labor Statistics.

In a brief Aug. 11 note, economists from Bank of America theorized that older Americans are retiring en masse because of a booming stock market.

"Labor force participation is collapsing among older workers," the economists wrote. "We think the strength of the equity market is partly to blame."

Are older Americans retiring because of a booming stock market?

The value of the S&P 500 has more than tripled since its low ebb in the 2020 COVID-19 downturn.

"I personally see more people with a million dollars in their 401(k) than I ever have," said James Cox , managing partner for Harris Financial Group. "And these are psychologically important numbers to make somebody let go of their paycheck."

The employment rate among Americans ages 55 and older rose steadily from the 1990s into the 2010s. It dipped dramatically during the pandemic, a shock that pushed many older Americans out of the workforce.

A reeling stock market in 2022 drove up the employment rate for older Americans, but their participation has declined sharply over the past two years.

"We think this is related to the 35%+ increase in the S&P 500 over the last two years," the economists wrote, in a post headlined "A stock-fueled retirement party." CNBC first reported the findings.

The American workforce has been getting older

If older Americans are indeed bailing out of the workforce, their exodus could reverse a decadeslong trend.

The older workforce has nearly quadrupled in size since the mid-1980s, Pew Research reported in 2023. More older Americans are working, and, thanks to the baby boom, there are lots more older Americans.

The share of workers ages 55 and up has risen from 15% to 23% over the past 20 years, the Government Accountability Office reported in March 2026.

"There has been a general trend toward working more at older ages," said Monique Morrissey , a senior economist at the Economic Policy Institute. "But it was interrupted by COVID. And some of those people came back, but a lot of them didn't."

The "stock-fueled retirement party" post was based on "more of a theory than anything else," said Stephen Juneau, senior U.S. economist at Bank of America. Juneau wrote the note with fellow economist Aditya Bhave.