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25% of Americans May Delay Retirement Because of Inflation
May 31, 2022
With prices climbing at the fastest pace in more than 40 years, Americans’ finances are being squeezed, forcing them to change their spending and saving habits.
As a result, one-quarter of Americans will have to delay their retirement, according to data collected by the BMO Real Financial Progress Index.
The main reason that Americans will have to delay retiring is that higher prices are disrupting their ability to save, the survey found. 36% of respondents said they had reduced their savings, with 21% specifically saying they are putting away less for retirement to keep up with climbing prices.
Younger Americans were most likely to reduce their savings, with more than 60% of those aged 18 to 34 responding that they had pulled back on retirement contributions to make up for a higher cost of living.
Workers who are closer to retirement age have been more able to maintain their savings habits, but they are facing a volatile stock market that may force them to push back their retirement plans.
The survey also found that Americans are changing their spending habits because of inflation. Nearly half (46%) said they were eating out less, and almost one-third (31%) said they were driving less.
More Americans, however, are turning to financial advisors to help achieve their financial goals. More than half, 52%, said that working with an advisor was crucial in helping them meet their goals, a 6-percentage point increase from last quarter’s survey.
