Americans Concerned Their Retirement Savings Aren't Keeping Up With Inflation.

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A recent survey reveals that almost 80% of pre-retirees and a significant portion of current retirees express concern regarding their savings and investments failing to keep pace with inflation.

In 2024, retirees reported a decreased likelihood of feeling financially "better off than anticipated" compared to 2021.

Additionally, some pre-retirees and current retirees are facing caregiving duties, with many indicating they feel ill-equipped to manage a health crisis involving a family member.

Inflation remains a significant concern for both retirees and individuals who are still several years away from retirement, impacting their financial well-being.

According to a survey conducted by the Society of Actuaries (SOA), nearly 80% of pre-retirees and a majority of current retirees expressed worries that their savings and investments are not keeping pace with inflation. The survey included participants aged 45 to 80.

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In 2024, retirees were less inclined to report being "better off than expected" financially compared to 2021. Although inflation has decreased from the peaks observed in the summer of 2022, the costs of essential items such as rent and food remain high, diminishing individuals' purchasing power.

"Even though inflation rates have come down, many are still affected by high prices for housing and groceries," said Anna Rappaport, chair of the SOA Committee on Post-Retirement Needs and Risks.

A significant portion of pre-retirees, exceeding fifty percent, along with nearly one-third of existing retirees, report that increasing costs have adversely affected their food and daily living expenses. The rise in prices has compelled some pre-retirees, particularly those earning less than $100,000 annually, to modify their savings approaches.

Additionally, Americans are facing challenges related to caregiving while managing financial pressures.

Over ten percent of pre-retirees are currently engaged in providing care or have previously cared for relatives who are not their children. Furthermore, should the need arise to financially assist a family member, 38% of pre-retirees and 27% of current retirees express feeling ill-equipped to handle a family member's medical emergency or health-related issue.

“The costs and caregiving obligations connected to a medical emergency or health issue can be very high," said Rappaport.

Despite the concerns about inflation and caregiving challenges, there are opportunities for Americans to adjust and improve their financial strategies. Many are actively seeking ways to better manage their savings, such as modifying investment plans and exploring alternative financial tools. The decreasing inflation rates provide some relief, and individuals can benefit from more stable economic conditions.

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Furthermore, the rising awareness of the impact of caregiving on financial well-being encourages proactive planning. With the right financial guidance and adjustments, both pre-retirees and retirees can take steps to secure a more comfortable and sustainable future, ensuring long-term financial health.