Inflation is pushing some older Americans to delay their retirement plans


As inflation rises, many Americans are changing life stages, including retirement.

Some 13% of Gen Xers and Baby Boomers say they have postponed or considered delaying their intention to leave the workforce due to soaring costs.

That’s according to a Nationwide Retirement Institute survey, showing an intergenerational surge of Americans canceling or postponing major events due to rising prices.

Annual inflation soared 7.9% in February, a new high in 40 years, according to the US Department of Labor, accounting for the cost of food, gas, housing and more.

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Nearly all consumers are worried about inflation, Nationwide found, and most expect the cost of living to continue to rise over the next 12 months.

Someone nearing retirement or already living on a fixed income may be especially vulnerable to inflation, said Zachary Bachner, certified financial planner at Summit Financial Consulting in Sterling Heights, Michigan.

“When prices go up, they’re usually forced to reassess their budget and find ways to reduce spending,” he said.

And stock market declines can create other problems for some retirees, depending on their portfolio construction and the timing of withdrawals, known as “streak of returns” risk.

Inflation is definitely no reason to postpone [retirement].

Anthony Watson

Founder and President of Thrive Retirement Specialists

Recent declines in stock and bond prices may expose retirees to this risk if they sell assets at low prices to cover rising costs, Bachner said.

While most investors think rising costs will hurt retirement savings, some advisers say inflation alone hasn’t changed their clients’ plans to stop working.

“Inflation is certainly no reason to postpone [retirement]”said CFP Anthony Watson, founder and president of Thrive Retirement Specialists in Dearborn, Michigan. “I think it’s just fear and uncertainty.”

Those delays may reflect a lack of understanding and confidence in their retirement plan, he said.

Many retirees can avoid the brunt of some rising costs, according to JP Morgan’s Guide to Retirement 2022.

For example, although gas prices have risen about 24% over the past month, according to AAA, retirees tend to drive less, making them less vulnerable to surges at the pump.

And when you separate health care, retirees typically spend less on other categories, such as food, gas and housing, until age 80, the report found.


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