Americans Facing Financial Hardships as Retirement Becomes a Distant Dream
A growing number of hardworking Americans are reconsidering their retirement plans, feeling forced to work longer than anticipated as they grapple with the ongoing burden of inflation and rising costs. According to a recent survey by LiveCareer, a staggering 8 in 10 respondents have thought about delaying their retirement due to financial reasons. A shocking 92% fear they will have to extend their working years beyond what they originally planned.
“Our survey reveals that financial stability is a primary concern among participants, with many fearing they won’t be able to afford to retire and keep up with the bare essentials like health care, or that they might become a financial burden to their loved ones,” stated Jasmine Escalera, a career expert at LiveCareer.
Retirement or Nightmare? Americans’ Fears Revealed
The survey highlights a stark reality: retirement is now more terrifying than death for many Americans. An alarming 61% of workers expressed greater fear of retirement than death, while 64% found the thought of retiring scarier than the idea of getting divorced. Why? Because they worry they will run out of money during retirement, with 39% concerned about becoming a “financial burden” to their families and another 39% fearing they won’t have enough saved for medical emergencies or other unexpected expenses.
Vanguard’s latest data reveals that while the average balance in employer-sponsored retirement plans increased to $134,128 in 2023—a 19% jump from the previous year—the median balance is only $35,286. Despite these gains, these figures are a far cry from the $1.46 million Americans believe they need to retire comfortably.
Financial Pressure Mounts as Americans Battle Inflation
Americans are struggling under the weight of economic hardships. From sky-high interest rates to relentless inflation that makes everyday necessities like groceries and gasoline more expensive, the financial challenges are mounting. Low-income Americans are feeling the pinch the most, as they face a disproportionate impact from price fluctuations.
While inflation has cooled from the alarming 9.1% peak in June 2022, it remains well above the Federal Reserve’s 2% target. When comparing prices from January 2021, before the inflation crisis began, costs are up a staggering 20%.
With the economy in such a precarious state, many are questioning whether retirement is still a realistic goal. More than a quarter of non-retired investors fear they might have to return to the workforce at some point due to inadequate savings if they were to retire in the next year. A sobering 19% doubt they will ever save enough money to retire at all, according to separate survey data from Nationwide.
“Americans believe they will need over $1 million to retire comfortably, a figure that could be discouraging for even the most committed retirement savers,” said Rona Guymon, senior vice president of Nationwide annuity distribution.
The American Dream of Retirement is Fading
As economic uncertainty looms and the cost of living continues to rise, the American dream of a comfortable retirement is slipping further away. Many Americans are left wondering if they will ever have the financial security to retire or if they will be forced to keep working indefinitely. The message is clear: Without significant changes, the future of retirement in America looks increasingly bleak.
