A recent poll has shown that inflation is prompting numerous Americans to reevaluate their retirement strategies. An increasing segment of individuals approaching retirement or who are already retired are postponing their retirement or reentering the job market due to escalating costs. According to the F&G Annuities & Life survey, over two-thirds (68%) of those pre-retirement intend to delay their retirement plans, up from 64% the previous year.
Among those surveyed, 44% identified inflation as the reason for their revised plans. The ongoing consequences of elevated prices, even with a decrease in inflation rates, as well as the Federal Reserve’s attempts to control inflation through higher borrowing costs, have had an impact on many people. Additionally, some participants expressed that returning to work brings intellectual engagement, with one-third mentioning their love for their jobs and the mental stimulation it yields as a reason for postponing retirement.
“Navigating the current macroeconomic landscape remains a challenge for those close to or in retirement,” stated F&G CEO Chris Blunt. “Americans are reevaluating what retirement signifies for them, which may differ significantly from prior generations. A proactive approach to financial planning can help mitigate certain economic uncertainties and empower individuals to concentrate on their tailored retirement journey.”
The survey also pointed out that Generation X is especially worried about the implications of inflation on their retirement plans.
Inflation’s effect on retirement timelines
As per the survey results, 71% of Gen Xers are contemplating or have postponed their retirement, rising from 65% in the prior year. In addition to inflation, 49% from this generation fear they have insufficient savings for retirement, while 42% seek more financial options and a stronger safety net.
F&G President John Currier remarked, “As Gen Xers approach retirement, their concerns deepen. Obtaining sound advice and financial resources can help ease these worries, including consulting with a financial expert and exploring options like fixed indexed annuities (FIAs) and registered index-linked annuities (RILAs) that strike a balance between growth potential and protection against losses.”
Workers believe that they require $1.5 million to retire comfortably; however, many are far from achieving this goal.
A survey from Northwestern Mutual indicated that one-third of workers have less than $50,000 in savings and investments, and 14% possess less than $1,000. Only about half of Baby Boomers (49%) and Gen Xers (48%) are confident they will be financially secure enough to retire comfortably, with many worried about outliving their savings. Alarmingly, more than a third of older Americans have yet to address this expected shortfall.
Aditi Javeri Gokhale, Northwestern Mutual’s chief strategy officer, observed, “Individuals’ ‘magic number’ for a comfortable retirement has reached an unprecedented level, and the discrepancy between their aspirations and actual progress has never been wider. Inflation is amplifying our expectations regarding retirement savings and increasing the urgency to plan and maintain discipline.”
