A growing number of Americans are considering delaying their retirement plans and working longer than planned as they continue to battle high prices, according to a new survey published by LiveCareer.
More than 8 in 10 respondents said they have thought about postponing their retirement for financial reasons, while another 92% expressed concern that they will have to work longer than planned.
“Our survey reveals that financial stability is a primary concern among participants, with many fearing they won’t be able to afford to retire and keep up with the bare essentials like health care, or that they might become a financial burden to their loved ones,” said Jasmine Escalera, a career expert at LiveCareer.
Retirement elicits fear in many workers, according to the survey.
THE ‘MAGIC NUMBER’ TO RETIRE COMFORTABLY HITS NEW ALL-TIME HIGH
About 61% of workers said they fear retirement more than they do death, while 64% said the thought of retiring is scarier than the thought of getting divorced. One reason for the fear is that Americans are worried they will run out of money in retirement.
About 39% said they are concerned retiring will make them a “financial burden” to loved ones, and another 39% expressed fear that they won’t have enough money stashed away for medical emergencies or other unexpected costs.
Vanguard data shows that the average balance in an employer-sponsored retirement contribution plan rose to $134,128 in 2023, a 19% increase from the previous year. The median account balance was $35,286, a 29% increase from 2022. The sizable increase in account balances stems from an increase in equity and bond markets as well as ongoing contributions over the year, Vanguard said.
AMERICANS ARE WORRIED ABOUT OUTLIVING THEIR RETIREMENT SAVINGS
Despite the jump, account balances are still nowhere near the $1.46 million figure that Americans believe they need to retire comfortably.
Consumers are grappling with a number of financial headwinds, including steep interest rates and ongoing inflation that has made the cost of just about everything from rent to gasoline to groceries more expensive. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily affected by price fluctuations.
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While inflation has fallen considerably from a peak of 9.1% notched during June 2022, it remains above the Federal Reserve’s 2% goal. And when compared with January 2021, before the inflation crisis began, prices are up 20%.
The uncertain economic landscape has many Americans reconsidering whether retirement is a realistic goal. More than one-quarter of all non-retired investors said they would likely be forced to return to the workforce at some point due to inadequate savings if they were to retire within the next 12 months, and 19% doubt they will ever save up enough money to retire, according to separate survey data from Nationwide.
“Americans believe they will need over $1 million to retire comfortably, a figure that could be discouraging for even the most committed retirement savers,” said Rona Guymon, senior vice president of Nationwide annuity distribution.
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