Personal Finance
Americans Say These 7 Factors Are Causing Their Vision of Retirement to Change
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24/7 Wall St. Key Takeaways:
- Inflation is the biggest factor impacting Americans’ retirement plans, but many others are also contributing.
- While some are adjusting their savings strategies or delaying retirement, others are reconsidering what retirement itself might look like.
- Also: Take this quiz to see if you’re on track to retire (Sponsored)
No plan survives first contact, including retirement plans. Rising costs and economic uncertainty have reshaped what many people have envisioned for their retirement years. In fact, over 65% of Americans agree that recent events have impacted their retirement plans.
Using data from the National Institute on Retirement Security, we’ll explore the top factors that are causing Americans to take a new look at their retirement vision and what this means for their future.
1. Inflation and the Rising Cost of Living
The number one concern for Americans rethinking their retirement is inflation. With 31% citing rising costs as the driving factor, many are realizing that their savings may not stretch as far as they once thought.
Basic expenses like housing, healthcare, and groceries are suddenly much more expensive than they were only a couple of years ago. This may force many to continue working through their intended retirement date.
2. Struggling to Save Enough
For 16% of Americans, saving for retirement turned out to be much harder than they envisioned. Many have had to dip into their savings to cover costs and emergency bills. This uncertainty has led to many pushing out their retirement date.
3. Working Longer or Never Retiring
More and more Americans are coming to terms with the fact that they may not retire at all (or work well into their retirement years). The combination of insufficient savings and increased costs is pushing as many as 10% of Americans to delay their retirement or reconsider it altogether.
4. Lifestyle Changes and Retirement Plans
For 8% of Americans, the vision of retirement has shifted due to changes in their lifestyle or living arrangements. Some may be opting for a more modest retirement, while others may be upping their expectations.
5. Political Dynamics
Current political dynamics are weighing on the minds of 7% of Americans. The chance of future government policies changing (like Social Security, especially) has led to many reconsidering how they’ll fund retirement.
6. Health Concerns
Rising healthcare costs are also causing some to rethink their retirement. Healthcare is becoming more and more expensive, and these costs are almost always unpredictable. It’s easy for healthcare costs to uproot even the most grounded retirement plan.
7. Job Loss and Income Reduction
The loss of a job or decrease in income has impacted 5% of Americans’ retirement outlook. This may be due to a layoff or reduced wages. The financial blow can easily set back anyone’s retirement plan. They may need to work longer to make up for lost time and savings.
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