Many people have dreams for retirement, from buying a condo in a warm climate to spending more time with grandchildren. However, more people are now finding what they thought would be their retirement filled up with… more work.
Love keeping up with business news? Download the Audacy app and follow WBBM Newsradio to get WBBM’s Weekend Wallet newsletter!
“The problem is twofold, explained Craig Bolanos, co-founder and wealth advisor at VestGen Wealth Partners, who joined Rob Hart on WBBM Newsradio’s Noon Business Hour to discuss the phenomenon. “Number one, the inflation we’ve spent 58 months – 58 months, that’s almost five years – above the [Federal Reserve Bank’s] 2% target.”
Bolanos said the second factor pushing would-be retirees back into the workforce is the lingering impact of the COVID-19 pandemic. During the early stay-at-home stages of the global health crisis, a considerable amount of people jumped to retire as businesses shuttered, temporarily closed, furloughed workers and let some workers go.
“Some of those early retirement decisions combined with the big [Consumer Price Index] lie,” that things aren’t expensive,” finally coming home to roost for many Americans,” said Bolanos.
Not only do some retirees have to head back to work, some have to look for work and settle for less than they were making before they retired, at least compared to cost of living increases, he confirmed.
“There’s far too many people coming back to work simply because they didn’t have a plan and the cost of living has increased so dramatically that people are in the need of the additional income,” he explained.
According to Gallup polling, just under 60% of Americans said they had money in a retirement plan as of last June.
Hart noted that there’s also the case of retirees who would have preferred to keep working.
“There’s a lot of winking and nodding,” when it comes to potentially age-related staff cuts, Bolanos agreed. He added that “I think a lot people know their age-based discrimination shrouded inside of an acronym, but the reality here is this, the biggest disservice anybody can do when they’re just doing an online retirement calculator is picking a retirement age. No people need to have retirement goalposts.”
What that means is, to face the great “un-retirement,” it’s best to save up as if you will be retired or at least not working for as much income, at some point in the future.
“There needs to be another set of plans that says if you get retired early, not by your choosing, taking care of a loved one, a reduction in force at work, you gotta have the finances to measure to that early go post because too many people don’t work as long as they want to because they're forced into retirement through their employer, mergers and acquisitions,” he said.