Council on Aging (COA) Corner – January 2024

Retirement Worries: Inflation and Market Swings Raise Concerns: The 2023 Retirement Confidence Survey reveals that Americans are feeling less secure about their retirement due to ongoing inflation and recent stock market fluctuations. Conducted by the Employee Benefit Research Institute (EBRI) and Greenwald Research, the survey captures the concerns of both workers and retirees, marking a significant decline in confidence levels not seen since 2008.

Key Findings:

  1. Market Impact: The sharp 19.4% drop in the S&P 500 in 2022 and persistent inflation have affected retirement confidence.
  2. Worker Confidence: Worker confidence in living comfortably throughout retirement has dropped from 73% in 2022 to 64% in 2023.
  3. Retiree Confidence: Retiree confidence has also seen a decline, falling from 77% to 73%, reminiscent of the 2008 financial crisis.
  4. Inflation Concerns: 84% of workers and 67% of retirees worry about rising living costs affecting their ability to save money.
  5. Debt on the Rise: Six in 10 workers report rising debt levels, particularly high-interest credit card debt.
  6. Factors Affecting Confidence: Concerns include inflation, potential recession, and interest rate increases, impacting retirement outlook.

Why it Matters Locally:

  • Personal Finances: Local residents may feel the pinch of rising living costs, impacting their ability to save for retirement.
  • Investments: Those with investments in the stock market may be concerned about the impact on their retirement portfolios.
  • Debt Management: Rising debt levels, especially credit card debt, are a common challenge faced by local workers.

Navigating Retirement Challenges:

  • Social Security: While Social Security comes with built-in inflation protection, the degree of protection varies based on income levels.
  • Housing Costs: For seniors who own their homes, housing costs are partially protected from inflation, with exceptions like property taxes and maintenance.

Expert Insight: Craig Copeland, director of wealth benefits research at EBRI, notes, “This is really the first time we\’ve seen a significant change in confidence since the pandemic, and it’s the largest we\’ve seen since the Great Recession.”

Takeaway for Local Readers:

  • Stay Informed: Keep an eye on your retirement savings and stay informed about market trends.
  • Financial Planning: Consider consulting a financial advisor to navigate inflation concerns and debt management.
  • Community Support: Local resources and community programs can offer support for financial planning and debt reduction.

In summary, local residents may want to reassess their retirement plans, considering potential impacts from inflation and market fluctuations. Seeking professional advice and community support can be valuable during uncertain financial times. 

Edited by Yvonne La-Garde from article by Mark Miller, columnist for Reuters.

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