Recent surveys reveal that about 44 percent of retirees are contemplating returning to work. This shift is largely driven by inadequate increases in Social Security benefits that fail to match the high inflation rates experienced in recent months. Despite a 3.2 percent cost-of-living adjustment in 2024, retirees continue to struggle financially, with the actual rate of inflation surpassing this adjustment in March, April and May.
Since President Joe Biden took office, inflation has been a persistent issue, with the consumer price index showing a significant increase of 19.4 percent by early 2024. This economic challenge has led to a diminished purchasing power for retirees, as noted by Social Security and Medicare analyst Mary Johnson.
The average monthly Social Security payment in 2024 stands at $1,907, which falls far short of the approximately $4,818 that older Americans reported spending monthly in 2022. For many, Social Security was never intended to be their sole income source in retirement, yet a substantial 27 percent of Americans rely on it exclusively, according to recent surveys. (Related: The end of retirement: Baby boomers working through their golden years.)
Adding to these financial pressures are soaring costs across essential categories like rent, gasoline and groceries. For instance, grocery prices have surged by over 21 percent since early 2021, while shelter costs have risen by 18.37 percent. Energy prices have seen an even steeper increase of 38.4 percent, further straining household budgets.
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Confronted with these economic realities, a significant majority of retirees – approximately 61 percent – report daily financial struggles. This challenging landscape has prompted many Americans to reassess the feasibility of retirement as they navigate an uncertain economic future.
Financial insecurity preventing older Americans from fully retiring
The trend of retirees returning to work is revealing significant shifts in post-retirement employment preferences. According to recent surveys and analyses:
- One in six retirees is contemplating a return to work, with a notable preference for remote positions, as highlighted in a Paychex survey reported in February 2023.
- Financial insecurity is a pressing issue for many retirees, with 41 percent attributing their concerns to insufficient retirement funds, as found in a Bankrate survey from July 2023.
- The desire for economic stability is evident, with 74 percent of U.S. adults viewing homeownership as a cornerstone of the "American dream" – surpassing even retirement comfort, career success and educational attainment, according to a Bankrate survey from April 2023.
- Reflecting these concerns, the number of individuals aged 65 and older actively seeking employment has risen sharply by 144 percent over the past two decades, as reported by the Department of Labor.
The onset of the Wuhan coronavirus (COVID-19) pandemic prompted an unusual spike in retirements, with 4.2 million Americans leaving the workforce between the pandemic's onset and mid-2021, according to the Federal Reserve Bank of St. Louis. Factors such as safety concerns, remote work challenges and financial support programs contributed to this trend.
However, as financial markets experienced fluctuations in 2022 and beyond, coupled with a post-pandemic economic landscape, many retirees are reconsidering their retirement decisions. The percentage of retirees returning to work increased from 2.1 percent in June 2020 to 3.2 percent by March 2022 – signaling a shift toward rejoining the workforce for financial stability.
These trends underscore a complex interplay of economic factors and personal motivations shaping retirement decisions in contemporary America.
Watch this video detailing why retirees are returning to work.
This video is from the Daily Videos channel on Brighteon.com.
More related stories:
Age of Unretirement: Former retirees getting back to work as inflation gets worse.
Savings for retirement? Federal government to determine how much money you actually 'need.'
What your employer may not tell you about retirement accounts.
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