As inflation continues to take a bite out of Americans' budgets, it is also changing their retirement plans. A new AARP survey finds 1 in 4 adults over age 50 now have no plans to retire, and more than two-thirds are concerned about prices rising faster than their income. The survey also finds about 1 in 4 have no retirement savings at all.
These worrisome numbers come as most baby boomers are reaching retirement age in what some analysts have called a Great Retirement Boom. "A lot of people who have no retirement savings are going to look upon Social Security as a pension plan, which it was never designed to be," says Mitch Kramer, CEO of Fluent Financial in Dallas. "And with the rising inflation we've experienced in recent years, many people realize they're just going to have to work for the balance of their lives."
High prices aren't the only headwind facing retirement savers. Debt is also piling up at record levels. One-third of older adults in the survey carry a credit card balance of more than $10,000, with about 1 in 10 having a balance of more than $20,000.
Approaching this year's election, the Biden administration has touted improving inflation numbers and a 'soft landing' for the economy. But the public does not seem to share that optimism. The AARP survey finds only one-third of those over 50 believe their finances will be better one year from now. "People say I'm putting gas in my car, going to the grocery store, and it's costing me a lot more money...plus I've got more credit card debt, so I'm not doing as well," says Kramer. "That's why they don't trust the media and the politicians, and they feel like they're being lied to."
As for what you can do to avoid working for the rest of your life, Kramer advises those under 50 to start saving yesterday. "The biggest asset you have when you're young is time, so max fund your savings, max fund your retirement plan, so that money can start growing now," he tells KTRH. "And no matter how old you are, the best advice is to just track your expenditures. You really can't control what things cost, but you can control what you spend."
Photo: EyeEm