Retirement is the final chapter of the American dream. But the dream of the “golden years” is quickly turning into a fairy tale for a growing number of people.
A survey by the American Advisors Group found that more than a third of Americans today feel unprepared or unsure if they are on track for retirement. And nearly a third of seniors say they either plan to work through the age of 70 or never retire, according to a study by BlackRock.
“The United States is definitely facing a retirement crisis,” said Nari Rhee, a director of the retirement security program at the UC Berkeley Labor Center. “If we don’t do anything about it, years down the line you’re going to wind up with a lot more seniors in poverty and reliance on public services.”
The pandemic, a war in Europe, interest rate hikes, as well as fears of a recession have all led to significant turmoil in the market, which have drained retirement savings. But inflation is quickly shaping up to be the most disruptive force.
“If you’re retired and on a fixed income, inflation really, really hurts,” said Rhee. “We’ve come out of decades of historically low-interest inflation to all of a sudden pretty substantial inflation, especially in things that matter to people, which is food and fuel.”
One million dollars in a retirement account just two years ago is worth about $120,000 less when adjusted for inflation, and now, with that financial backdrop, a quarter of Americans say that are expecting to delay their retirement due to rising consumer costs, according to a survey by BMO Harris Bank.
Continue reading at CNBC.