JACKSONVILLE, Fla. – A record number of Americans are reaching retirement age in 2024 but many of them say they’re critically underprepared.
A new study by Prudential Financial shows inflation is delaying retirement for thousands of Americans.
So how is retirement changing with inflation concerns? Certified financial planner Bert Costa helped News4JAX break down the details.
“$1 from 2020 does not buy $1 worth of goods and services today,” Costa said. “That’s a problem.”
The new survey by Prudential Financial reveals that 55-year-old Americans are far less financially secure than older generations as they enter the crucial 10-year countdown to plan and prepare.
Costa said for many of his clients it means taking on a part-time job come retirement age.
“It’s very common, that people retire from their full-time employment, maybe they’ve been with a company 15, 20, 30 years,” Costa said. “And now they’re gonna go and do something maybe more part-time, something they have a passion for. And maybe it doesn’t feel so much like work.”
The study also shows that inflation is upending a majority of American’s retirement plans. One-third of 55-year-olds and 43% of 65-year-olds have delayed their retirement because of the higher cost of living.
”There’s a really interesting dynamic going on right now. As we speak, there’s 11,000 people a week, 11,000 Americans a week turning age 65,” Costa said.
Costa said this is a record number as a huge amount of people are turning 65 in 2024.
“There’s no question that inflation has a big impact on their retirement, what they save for retirement may not be enough anymore. And studies show that that the demographic between age 55 and 65 in America right now has under-saved for retirement.”
News4JAX asked community members how they’re feeling about retirement; inflation is a common consideration but not always a concern.
“I think that’s one of the things that will, you know, it’ll naturally over time, get offset by wage increases, at least you would expect,” Peter Thune, a man saving for retirement, said. “I mean, that’s kind of my expectation is as inflation increases, I’ll get paid more and I’ll be able to save proportionally to what I eventually want to set aside for retirement.”
Another man said he hadn’t started saving as much as he’d like.
“No, I have 9, 11 and eight-month-old—so no, I’m 41 years old,” Brandon Drumms, a father of three, said. “I got surprised. So yeah.”
Costa said his advice would be to start saving today.
“Start as early as possible,” Costa said. “Take advantage of the power of compounding interest, take advantage of watching your money compound. You know, participating in your company’s retirement plan is a great place to start.”