This is how retirement is changing amid concerns about inflation

This is how retirement is changing amid concerns about inflation

This is how retirement is changing amid concerns about inflation

JACKSONVILLE, Fla. – A record number of Americans will reach retirement age in 2024, but many of them say they are not very prepared.

A new study from Prudential Financial shows that inflation is delaying retirement for thousands of Americans.

So how is retirement changing with concerns about inflation? Certified financial planner Bert Costa helped News4JAX break down the details.

“1 dollar in 2020 does not buy 1 dollar in goods and services today,” Costa said. “That is a problem.”

Prudential Financial’s new survey reveals that Americans age 55 are far less financially secure than older generations as they enter the crucial 10-year countdown to planning and preparing.

Costa said that for many of his clients it means taking on a part-time job when they reach retirement age.

“It’s very common for people to retire from full-time employment, maybe they’ve been with a company for 15, 20, 30 years,” Costa said. “And now they’re going to do something maybe more part-time, something they’re passionate about. And maybe it doesn’t feel so much like work.”

The study also shows that inflation is disrupting most Americans’ retirement plans. A third of 55-year-olds and 43% of 65-year-olds have delayed their retirement due to the higher cost of living.

“There is a really interesting dynamic going on right now. As we speak, there are 11,000 people a week, 11,000 Americans a week turning 65,” Costa said.

Costa said this is a record number, as a large number of people will turn 65 in 2024.

“There is no doubt that inflation has a big impact on your retirement; What they save for retirement may no longer be enough. And studies show that the 55- to 65-year-old demographic in the United States right now has not saved enough for retirement.”

News4JAX asked community members how they feel about retirement; Inflation is a common consideration, but not always a concern.

“I think that’s one of the things that will naturally be offset by salary increases over time, at least as you would expect,” said Peter Thune, a man saving for retirement. “I mean, that’s my expectation: As inflation increases, I’ll get paid more and I’ll be able to save proportionately to what I ultimately want to set aside for retirement.”

Another man said he had not started saving.

“No, I’m 9, 11 and eight months old, so no, I’m 41 years old,” said Brandon Drumms, a father of three. “I was surprised. So yes.”

Costa said his advice would be to start saving today.

“Start as soon as possible,” Costa said. “Take advantage of the power of compound interest, take advantage of the ability to see how your money is compounded. You know, participating in your company’s retirement plan is a great starting point.”

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