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Inflation Is Pushing Many Older Americans Into ‘Un-Retirement’
By Pete Grieve MONEY RESEARCH COLLECTIVE
The top reasons retirees are considering part-time jobs include inflation, personal fulfillment and insufficient savings.
Nearly a third of retired Americans are thinking about going back to work as the high cost of living eats away at retirement savings.
Following three years of elevated inflation, 30% of retirees say they are considering working a temporary job (between one and three shifts per week), according to a new report from Indeed Flex, a job search app. Many of these people are worried about outliving their retirement savings.
“Increased cost of living is the driving force behind why the aging population is considering un-retirement,” Indeed said in the report, noting that 71.6% of retirees cite inflation as the reason that going back to work is on their mind.
Even though inflation has cooled to an annual rate of 3.4%, down from the peak above 9% in June 2022, just about everything costs more than it did in 2021 when prices started spiking. The jump in the cost of living has been large enough that many older Americans who thought they were financially prepared for retirement are now reassessing if that’s actually the case.
Other reasons retired adults are considering temporary work include: personal fulfillment/keeping busy (39.7%), desire for social interaction (35.8%) and insufficient savings (20%).
Inflation stresses retirees’ budgets
The latest data from Indeed confirms what several other studies have found in recent weeks: The high cost of living is stressing retirees’ budgets.
Investment management firm Schroders reports that only 44% of retirees think they’ve saved enough for retirement and another 24% are unsure. Meanwhile, 89% of retirees are worried — or at least slightly concerned — about inflation lessening the value of their assets
While Social Security benefits are annually adjusted for changes in the cost of living, retirees also rely on other income in retirement — like 401(k) withdrawals or fixed-income savings — that can be negatively affected by inflation, meaning the money doesn’t go as far as anticipated.
More than 20% of retirees and near-retirees increased their retirement account withdrawals between 2021 and 2023 because of inflation, according to a report from economists at the Center for Retirement Research at Boston College. The average increase in withdrawals among this cohort was $3,620 over those two years.
“A bout of high inflation later in life is generally harmful to financial well-being,” the Boston College economists wrote. “Older households have just had a sharp reminder that inflation may not be stable throughout retirement.”
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Pete Grieve is a New York-based reporter who covers personal finance news. At Money, Pete covers trending stories that affect Americans’ wallets on topics including car buying, insurance, housing, credit cards, retirement and taxes. He studied political science and photography at the University of Chicago, where he was editor-in-chief of The Chicago Maroon. Pete began his career as a professional journalist in 2019. Prior to joining Money, he was a health reporter for Spectrum News in Ohio, where he wrote digital stories and appeared on TV to provide coverage to a statewide audience. He has also written for the San Francisco Chronicle, the Chicago Sun-Times and CNN Politics. Pete received extensive journalism training through Report for America, a nonprofit organization that places reporters in newsrooms to cover underreported issues and communities, and he attended the annual Investigative Reporters and Editors conference in 2021. Pete has discussed his reporting in interviews with outlets including the Columbia Journalism Review and WBEZ (Chicago's NPR station). He’s been a panelist at the Chicago Headline Club’s FOIA Fest and he received the Institute on Political Journalism’s $2,500 Award for Excellence in Collegiate Reporting in 2017. An essay he wrote for Grey City magazine was published in a 2020 book, Remembering J. Z. Smith: A Career and its Consequence.