According to CNBC, workers age 55 and older are leaving the labor force at a rapid pace as stock-market gains and AI-driven optimism lift household wealth. Bank of America economists said the trend reflects a “wealth effect,” with older workers seeing their portfolios swell enough to make retirement feel more affordable.

The labor force participation rate for workers age 55 and older has fallen from 38.6% in August 2024 to 37.2%, according to Bureau of Labor Statistics data. Bank of America economists Stephen Juneau and Aditya Bhave said labor force participation is “collapsing among older workers” and that equity-market strength is partly responsible.

The S&P 500 returned 26% in 2023, 25% in 2024 and 18% in 2025, including reinvested dividends, according to data compiled by Aswath Damodaran of New York University. The index is up about 16% so far in 2026. Federal Reserve data showed household and nonprofit net worth rose by $12.8 trillion to $195.9 trillion in the second quarter of 2026, the largest quarterly increase on record since 2000.

Thomas Ryan, a North America economist at Capital Economics, said the wealth surge has likely made retirement an easier decision for many people. Michael Reid, head of U.S. economics at the Royal Bank of Canada, said people who do not feel confident they can afford to retire would not leave the labor force, and the data would look different.

Economists said the trend is also being reinforced by demographics, as a record number of baby boomers reach age 65, and by early retirement packages from employers including Microsoft and federal workers under the Department of Government Efficiency, or DOGE. They said a stock-market downturn could prompt some recent retirees to return to work and reduce labor-market churn.