5 Reasons a Record Number of Americans Plan To Delay Retirement This Year
Though retirement is approaching soon for many in the baby boomer and Gen X demographic, there’s plenty of evidence showing that these same folks are putting off retirement. According to F & G Annuities and Life’s 2024 Retirement Reconsidered survey, “Just over half (51%) of pre-retirees over 50 and retired Americansare considering delaying or coming out of retirement.”
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Some reasons survey participants cited for delaying retirement include inflation, concerns about being adequately prepared, and still enjoying the intellectual stimulation and challenge of working. Here’s a breakdown of why people are choosing to delay retirement.
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1. Inflation
Although there’s some debate around the true amount of inflation Americans have been hit with, especially in the post-COVID economy, there’s enough to deter people from a full retirement. According to the F & G Annuities and Life survey, “Forty-four percent said inflation was the reason why they were altering their plans. “
Prices for basics like housing, transportation and food have increased considerably against wages. For those who are short on retirement savings, these price increases could deplete nest eggs earlier than anticipated.
2. Debt
Many aging Americans still carry substantial financial burdens, including mortgages, credit cards, and student loans, which can lead to anxiety about their financial future in retirement. For those contending with high-interest debt, there may be concerns about being able to pay down debt in time for retirement. Having to pay down debt on a fixed income is another reason many people are not leaving work. The goal here is to continue earning in order to pay off debt before fully retiring.
3. Insufficient Savings
Fidelity’s Retirement Preparedness Measure shows that 55% of Americans are in danger of not fully covering even estimated essential expenses like housing, health care and food in retirement. The results are based on a survey of more than 2,200 households and Fidelity’s retirement planning methodology.
A 2024 AARP study says that at least 20% of adults over the age of 50 have no retirement savings, and 61% of this same group are “Worried they will not have enough money to support them in retirement.”
Without enough savings to support a comfortable retirement lifestyle, many retirement-age Americans are choosing to continue working and padding their savings for a later retirement date.
4. Collecting Additional Social Security Benefits
The prospect of increased Social Security benefits can motivate many to stay in the workforce longer. Each year a person postpones claiming benefits beyond their full retirement age (FRA), their monthly benefit increases by approximately 8%.
This increase continues until age 70 and provides a compelling incentive for those who can afford to work longer. By waiting to claim Social Security benefits, retirees can maximize their earnings and potentially receive thousands of dollars more over in their retirement years.
It’s also worth noting that delaying retirement allows you to benefit from continued income and contributions to your retirement accounts, another way to boost your retirement nest egg.
5. Intellectual Stimulation and Career Enjoyment
For many, delaying retirement isn’t just about the money. It’s about the fulfillment they get from their career. It’s no secret that engaging in challenging tasks and problem-solving activities keeps the mind active and sharp, which contributes to overall cognitive health. For empty nesters or those with smaller social circles, a job can also be an important source of social interaction.
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For some, delaying retirement for these reasons can lead to a more fulfilling, productive life during their golden years — something that money cannot buy!
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This article originally appeared on GOBankingRates.com: 5 Reasons a Record Number of Americans Plan To Delay Retirement This Year