70% of Americans Over 55 Can't Afford to Retire
They simply can't afford to stop working, poll says.
A vast majority of older Americans say they consider retirement to be a thing of the past—because they simply can't afford to stop working. That's according to a new Axios-Iposos poll, which found that two-thirds of Americans age 55 and older plan to delay their retirement. Among that group, 70% say they believe they won't be able to afford to retire at all.
"Financial worries are the main reasons people feel they can't retire," Axios elaborated. "When it comes to how Americans finance retirement, few feel Social Security will cover most of their expenses.
Instead, most Americans—both retired and those who aren't—look to retirement accounts to finance this life stage." Those accounts include 401(k) plans, 403(b) plans, and individual retirement accounts (IRAs).
The pandemic and resulting inflation threw everyone for a loop. But it may have had an outsized effect on people approaching retirement age.
Forty-four percent of non-retired people aged 55 or older said they've had to change retirement strategies because of economic factors beyond their control.
But experts say it's important to keep saving for retirement—recent legislation has been passed to help shore up retirement benefits.
"Americans have experienced some tumultuous years, but through Congress' investment in retirement savings through the Secure Act of 2019, as well as individuals' continued commitment to save, we are optimistic for the future of retirement security," Kevin Barry, Fidelity Investments president of workplace investing, said in a recent post. And there has been some good financial news for retirement account holders and retirees in recent months.
According to Fidelity, retirement account balances increased in the first quarter of 2023 for the second consecutive quarter. And experts say a cost-of-living adjustment (COLA) will boost Social Security payments to retired workers by 3% starting in January. The average monthly check will rise by about $55—from $1,837 to $1,892.
Inflation has recently declined to a two-year low, and the prices for many staples have also come down, meaning lower grocery bills can benefit both people saving for retirement and those on fixed incomes.
Last November, the expected retirement age in the U.S. rose to 64, up from 62.6 in 2021. CNBC offers several tips for workers of all ages to beef up retirement savings.
They include "paying yourself first"—automatically putting a portion of each paycheck into a retirement account—using tax-advantaged retirement savings options and taking advantage of employer matching.