That’s definitely true as well. Either don’t marry or get to know your future spouse really well before committing. I’m fortunate I have a great wife and we are both committed to staying married. Unfortunately, many men and women today are not and it definitively hurts financial planning most of the time.

Delete

It happened to one of the guys that I work with. I don't know the chapter and verse, but his position was eliminated, and he was "laterally transferred" to another position that pays less. He's trying to get a better job, but he needs more flight hours to be able to apply for FO positions.

That's why I work hourly. I had to leave early yesterday for a doctor's appointment. Instead of burning an hour of PTO, I worked an extra hour last Saturday. Saturdays are also voluntary OT at time and a half.

Current job is fairly relaxed about time. If we need to leave early, we leave early. If we want to work late to make up for leaving early, we can. "Just let us know when you arent coming in" is the mantra.

But wait, there's more...

I retired from the Army at 46 as a SSG at 20 years TIS. My current gross pension is $2168.00/month. That's pre-deductions. I have the following deductions from my retirement pay:

1. Survivor Benefit Plan (fully paid after 360 payments and I reach age 70): $140.92, which allows my spouse to receive 55% of my pension for the rest of her life should I predecease her.
2. Tricare (including dental and vision): $151.19 (Still cheaper than any plans that my employer offers.)
3. Taxes: $7.81. (yes, we get taxed on our retirement pay.)

So, my net is  $1865.08.

Now, you can add my VA comp to that, which is around $2000. So, my total net retirement pay is $3865.08 per month. VA Comp varies from individual to individual so some will have more, some will have less.

To put it in hourly pay terms, that's around $24/hr.

Could I live on it? Probably, but it would require changes in my lifestyle. My post-army job started me out at $30/hr, which is pretty nice.

I know retired people who live comfortably on a lot less.

I also know people who live on a lot less per month. But it would be important to define “comfortably”.

If you pay all your expenses and have $20 left over before your next check, I would say that’s not being retired comfortably. But, if you spend every retired day watching TV all day, end the month with $20, and that’s the lifestyle you want, then perhaps you are living comfortably.

Defining what constitutes comfort in retirement will vary from person to person.

You also have to look at the future, when you cannot work. Sure, between my retirement, VA comp, and my wife's paycheck, we could live comfortably. However, I am 47, still hale and relatively healthy. Thus, I can work my $30/hr job, continue to contribute to my 401K/Roth IRAs, not have to resort to credit cards for emergencies, etc, etc.

Here’s a video that some may find beneficial.

You know, that was the main reason why I made my unnecessary purchase of a brand-new, fresh off the showroom floor, 2017 Indian Roadmaster. I had a perfectly good Honda Shadow that hadn't even hit 20K on the odo, but I wanted a big touring bike. I knew that if I kept putting it off, I night never get my Roadmaster.

We have a much older gentleman who works in our building.  His career has consumed his life despite it appearing as if his work doesn't fulfil him.  He has no one outside of work.  He has almost (just a car and a simple apartment) nothing outside of work.  We are pretty certain his last day of work will involve a coroner.  That said, we know he has several million in savings.  If he is a happy person he does a damned good job of hiding it.  He could have retired years ago with a good .mil pension, a good .gov pension, TSP and his health to enjoy his remaining years.  

I have heard of the prepping bug doing similar things to some people.  One can become so wrapped up in it that they forget that there is an entire world outside of it.

Don't be this man.  Life is too short to spend it being miserable and (depending on what you believe) you don't get a do over.

Some people all they know is work. They aren’t happy unless they are working. Frankly, there is nothing wrong with that if that makes you happy. They might be “miserable” working but they are even more miserable NOT working. I don’t want to be like the guy you mentioned but if he’s happy, I don’t think he’s doing anything “wrong”. I might not agree but it’s his life to live as he sees fit.

I also think some preppers get so wrapped up in it they forget to live life. I like guns but have travelled to places where I couldn’t have one. Some people refuse to go anywhere they can’t carry. I just use caution wherever I go and I understand human nature well enough that I typically am able to keep my wife and myself out of trouble wherever we go.

While I started this thread and have added what I consider to be bad retirement stories….I also don't think that everyone needs to live austere lives. If you want some toy or trip, save up for it and go enjoy it. I do recommend you avoid debt for recreation but otherwise, enjoy yourself. Enjoy the fruits of your labors. Just don’t forget to plan for the future. I think too many people live for today and forget about the future but that also doesn’t mean I think you should scrimp and save every penny you make. I think we should all find that balance between working, saving, and spending leading up to retirement.

If you actually have a retirement plan and stick to it….and modify it as needed….you are ahead of probably 95% of people out there.

so true. I remember my father bought a new corvette at around 70 and sold it with around 5k miles on it. He said it's not the same and just enjoyed being around family.
I'm 47 and drive my sports car to work every day because of that, but I bought it used for a fraction of the cost thought because I don't want to retire late like he did. I hope to not have to go to work anymore at 55 if things stay on track.
Lots of sacrifices that my wife and I take to do this. Even though we both make really good money, We don't take crazy vacations, act like bonus / raises don't happen, both work side hustles, and we build our homestead. We sometimes see family or friends on Facebook having fun taking trips, buying new cars, and racking up dept and wonder if we are doing it wrong. Then we think of what we have and will have at an early age and think it's worth it.

I'm shocked at my work how many people driving cars that are close to 100k. I overheard a girl at work saying she has no savings even though se drives a new truck. people eating out for lunch everyday or the market in lunch room ($8-15 sandwiches)
I brown bag it (actually a reusable lunch box to save money) and my wife works from home. She cooks a big meal that we eat for lunch and dinner all week. I eat eggs every morning from our chickens. My creamer at work is our freeze dried goat milk.

I do splurge at work for coffee. we have an executive lounge that you chip in money and have some really nice coffee at work. I need it to say away. It's cheaper than Starbucks, and even k-cups from the bargain store.
I have 3 great cups for less than .75 cents total. I tried instant and couldn't do it. I can do it every once and awhile.

What's sad is that I now spend more on cloths than my wife. She works from home and I'm in an office. I do get lucky with nice brands at discount stores in my size. I need to look professional at work.
Once I'm don't working it's whatever for cloths or cars. I really don't care.

I'm hoping to buy a cab tractor before I retire or work another year to buy it because as I get older the 1/4 driveway in winter sucks to snowplow. I did buy a mini cab tractor with a blower used for now. but we have 4 tractors now and I only want one that will do it all.

as I'm typing this I'm also working on one of my side hustles

Good thread.

I'v got a long way till retirement myself, but I have worked with several people like the OP describes.  It's far more common to be unprepared for retirement, than prepared.  

Boats, campers, new trucks and mini storage and eating out "because they don't have time" is bleeding a large chunk of the 50+ population dry.

Baffling and terrifying at the same time.

Another example....guy I know but not someone I consider to be a friend...my true friend list is very short...this guy is just an acquaintance.  

He has bounced from job to job over the past 20 years.  Always cashes out his retirement when he leaves an employer to pay his bills.  He's mid 40s now and has less than 10 years of accumulated retirement benefits.  He currently doesn't own a house and I don't think he ever has.  He spends the money he makes like water.  Over the past year he has purchased 3 Staccato pistols and he owns a fancy car he's making payments on.  He's had a series of failed relationships.  Anyone with a basic knowledge of humans can see the disaster coming with the women he chooses....but he doesn't see it and doesn't learn.  He's with another crazy woman now and it'll crash and burn in the future...it'll be painful to watch but he just refuses to learn.  

He is a hard working guy but zero financial sense.  He's another person who's going to get to retirement age with very little and will have to keep working to make end meet.  He'll have to delay taking SS in order to max out his benefit.  

It's kind of sad to see.  

Learn a lesson from these people...either the stories of the ones I have posted or people you know.  These stories of lack of financial planning for retirement are everywhere.  Don't let yourself be one of them.

We as a society have rightly preached the benefits and freedom.  However, at some point we as a society also failed to remind people that with freedom comes risk and responsibility.

Quite true.  That’s the intended point of this thread.

I’ve always believed that schools should have a mandatory personal finance type classes for JR and SR years of high school. Teach savings vs spending. The stock market. Investing strategies. Retirement funding. Etc. I think the voting public would be more likely (not guaranteed just more likely) to be opposed to excess government spending and would also be more likely to have more retirement plans other than social security.

PFFFFfffft. If you want to fundamentally change this country, get rid of payroll taxes and force everyone to make out a check to the feds every month for an amount similar to a mortgage payment… Think we’d be directly paying pensions to Ukrainians while our own SS will only be funded at 80% in 11 years?    

Because we are.

Can you please keep the Ukraine hatred stuff in GD? Everyone has opinions on the topic one way or another but that’s not what we are discussing here. We are discussing personal responsibility to prepare for your eventual/potential retirement.  

Pretty much everyone in this thread are advocating for planning for a retirement without Social Security or at least without depending on Social Security. If it is there, it should be bonus money.  If your only retirement funds are Social Security then you have failed at retirement planning.

I knew a guy who worked as an engineer. He had 53+ years in and was well into his 70s. He'd had a heart attack but kept working. Because of his age and years of service, he was probably making 10 cents an hour working vs. being retired. It wasn't clear to me whether he just liked the job or really didn't have anything else to do. I think his wife passed away and he didn't have hobbies so I suspect it was the latter. And, he would take some time to socialize during the day, too. That was his life. And, for some, what they do for a living is what defines them as a person. That won't be me.

I may work longer than I otherwise would if I still like what I'm doing. I may also keep working to buy a few more toys and/or get a homestead set up going. But as one older co-worker of mine said, "Once it stops being fun anymore, I'm out."

Is expecting your Govenrment to put your direct financial well-being ahead of other who contribute nothing toward it out of line? It doesn’t matter that you’re financially savvy, we were forced into the program and they owe us that money. Even for people who plan to not have it around, it could make for a decent improvement in quality of life for most people if they get what is coming to them.

When *IS* it a good time to walk about that? When it’s underfunded? When the stock market collapsed and takes all of those investments you made away?

I don't know who pretty much everyone is.... but don't lump me in there.  That's money I paid in and will never get what I should.  I absolutely plan on mine and expect to receive the full amount.  All this "don't expect it to be there" is desensitization to more theft by the government, and I won't participate in that nonsense.

Dave, I'm not following what you are trying to say here.

Do I expect the government to put the well being of those who have not sacrificed and saved ahead of those who have, Yes I do.  Simply because those who had the foresight and determination to delay their gratification will probably not riot if they are not given their basic needs.  Why wouldn't they you may ask?  Because they have already provided for their own basic needs, and joining in the riots would be a risk they are not willing to take while they still have resources to loose.

I do not believe I will receive social security funds, even though my employer and I have paid in to the system for years.  I fully expect there to be means testing to determine eligibility of payments.  As I live simply, save heavily, and have little debt, I expect to be told I no longer qualify for payments due to not "needing" the money.  I understand that this lifestyle in America is rare, and therefor, those of us that live this way can be safely ignored by those that depend on a favorable public opinion for their jobs.

In other words, it is not up to me whether or not the government decides to include me in Social Security payments, and it never has been.  The pyramid scheme known as Social Security simply has not collapsed - yet.

You can lump yourself into whatever category you want or don't want.  Doesn't matter to me.  

The Social Security Administration itself tells everyone who is paying attention not to plan on SS as the only source of retirement income.  It's plainly visible on the SS web site.  From the main page:

"The Social Security Retirement benefit is a monthly check that replaces part of your income when you reduce your hours or stop working altogether. It may not replace all your income so it's best to identify other ways to pay for your monthly expenses as you age."


Yes there are plenty of people who live on SS alone currently.  I know a few of them and a few of them are related to me.  If you have very low expenses and don't want much from retirement life then yes, you too can live on SS alone.  

We do know that by 2034 with no changes, SS will only pay out approximately 80% of promised payments.  If Congress doesn't do something, it's an automatic 80% drop in payments.  It'll be interesting to see what Congress does but I suspect they will keep kicking the can down the road till after 2030...and then, who knows?  

In my case, I personally believe (who knows if I'm right) I will get something from SS.  I don't see it going away.  But, I don't know how much I'll get.  So, I plan for nothing.  That way, if I get something it'll be just bonus.  My current retirements WITHOUT SS, should give me close to 100% income replacement as long as things continue as they have so far (nothing in life is guaranteed besides death and taxes).  If I do get something from SS (and I think I will) that's just bonus money for me to blow as I see fit.  But, if I never get anything I can get by without issue.   I'll just have a little less disposable income.  My wife and I are also working to get the house paid for.  We are getting closer to retirement and with the house paid for, our living costs will be quite low.  We are on track currently to have the house paid for in about 2 years and once it's paid for, the extra money will go into other retirement funding plans.  

People have been saying for years that SS "won't be there when I retire".   My dad was one of those people and guess what....he's now living on the SS he said would never be there for him.

If you want to plan for it as a required portion of your retirement....go right ahead.  I think you're making a mistake but that's just my opinion and I'm just a random guy on the internet.  If you believe in the SS system, you better believe the SS system when they tell you "it's best to identify other ways to pay for your monthly expenses as you age."  Pretty sure there is a reason the SS administration is warning people not to 100% rely on SS.

Finally, consider this from SS:
"The Trustees project that OASDI annual cost will exceed total income throughout the 75-year projection period. After the projected trust fund reserve depletion in 2034, continuing income would be sufficient to pay 80 percent of program cost, declining to 74 percent for 2097."

You and I cannot change the existing system.  We can like it.  We can hate it.  We can push for change.  We can do nothing.  But, realistically, things are unlikely to change.  So, we can either live in the fantasy world we want to live in (hint..it doesn't exist) or we can live in the real world.  Living in the real world requires planning for the way things are...not the way we want them to be.  

Social Security is totally funded from Social Security deductions from our paychecks (most of us at least).  It's not funded from regular taxes.  They can fix the lack of funding....by increasing the amount of money we contribute.  The average person will get more out of SS than they and their employers contribute.  What props the system up is people dying after they have put lots in but before they can pull much out of it. That's part of the reason the system is failing.  People are living longer than planned when the system was put in place.  But, people will raise hell about raising taxes too.  

If you are planning your retirement well, you will be moving into safer and safer investments the closer you get to retirement.  Early in your career you can survive the stock market dips.  As you get closer and closer to your retirement date, you should have your investments in safer and safer investments.  But, safe investments don't typically give the high returns the riskier investments produce.  Some people get addicted to the rapid rise of their investments so they keep them in riskier investments to keep the high returns coming in...and then when the stock market takes a hit right before they planned to retire, they start complaining that now they can't retire when they wanted to.  

Generally, those of us in this forum like to be self reliant.  Unless I misunderstand you, you seem to be advocating for a government solution to people's retirement.  My recommendation, also from some random guy on the internet, stop relying on the government to handle your retirement for you.  You will probably get something from SS but there is a fair chance it's not going to be what you want it to be(again that's just my opinion).  So, build your own retirement independent of the "planning" the government is doing for you.  I don't know your age but if you are closing in on retirement age and you don't have anything other than SS planned for your retirement, then good luck.  If all you have planned on is SS...then you should probably plan to work till 70 so you can max what you will get from SS.  

I am not and have never claimed to be any kind of financial advisor so anyone who wants to have the best plan for themselves in retirement should consult a financial advisor to figure out their best plan for themselves in their particular situation.  There is no one right answer for everyone but there is one wrong answer...failing to plan for yourself.

Personally, I think means testing is the least likely of the SS “fixes”.  But, I also am not convinced you are wrong either. It has been mentioned as a potential “fix”.

If you aren’t planning for it and that’s the fix Congress agrees on, then at least you weren’t planning on it. And if you are dependent on SS only and Congress chooses to do means testing….well I guess you’ll get the full promised amount….but you won’t have a comfortable retirement.

So, to me it appears better to not rely on SS as a necessity to live in retirement but it will be a nice additional income source if you (and I) get it.

Diversified income streams in retirement are always a good thing.   Many wealthy people have multiple income sources. When one source isn’t doing so great, another one is doing well. The more income sources we all have in retirement, the better.

Chatting with a younger coworker today.  30 yr old.  Nice guy.  Been working there for 6+ years.  Started talking about retirement.  He has no idea how our retirement works.  Not a clue.  He got really quiet as we talked and I encouraged him to log into his retirement accounts and take a look for himself.  He had no idea he even could.  At first he was a little defensive so I did what I could to reassure him I wasn't trying to criticize him but to encourage him to look into it for himself and then start planning for his own good.  I gave him some pointers and directed him to another person at work who knows even more than I do about our retirement options.  The guy I recommended he talk to is the most money smart guy at work and he knows everything about our retirement plans and options.  

I sincerely hope he takes it to heart.

Our current public education system is shit at teaching finances (both personal and governmental).  Our culture teaches 'spend spend spend!'.  A couple generations now have grown this way.  Yes there are some who do a good job at teaching their kids financial responsibility and yes there are those who pick it up third hand early and get really smart on it, but it shouldnt be surprising that a lot of people (one may even argue the majority) 40 and below (maybe even older at the top end) have little idea about how to save for emergencies or for retirement.  Many people don't know what they don't know.

You couldn't do a better job at quietly breeding a population who will become reliant on the govt if you tried.

I've been getting rid of bills, simplifying life and cutting expenses like a mofo.

Agreed on all counts.  Following the traditional model toward retirement doesnt work like it used should anymore, and people are living longer than they ever expected to.  Sprinkle in a massive dose of "The govt likes their money and likes yours even more" and nobody can really count on their retirement planning anymore.  Hell, you mention "Your annual withdrawal is sustainable and its in a trust", but how long before the govt finds a way to dip into that as well and torpedo even that type of planning?

Same, but I have to buy a house in the very near future. On the upside, I paid off ALL of my old credit card debt, and now have $10K in a high-yield (4.3%) savings account that is going towards a house. All my spare cash gets dumped into that account. It's amazing how quickly you can accumulate savings when you aren't sending a couple grand a month out the door to pay off CCs.

Essentially the same as both of you.  I went through my expenditures and found where I was spending money needlessly.  I still spend a little money here and there on things I like but don't need but if many of us reexamine where we are spending money, most of us will find areas where we can cut needless spending without affecting our standard of living.

Very true.  But I'm older than 40 and I was never taught how to plan for retirement either.  But, I started getting a little interest myself and then someone I greatly respect told me to carefully plan for my retirement.  I respected him a lot and I took that to heart. I'm sure glad I did because I wasn't taught about retirement planning growing up.  I'm very thankful to him for caring enough about me to encourage me to start thinking about my retirement.  

What do you think people should be doing to prepare for retirement?

I was on the money side, the midlife crisis I'm hitting right now has me travelling and spending money.  Dying rich ain't going to cut it, seems like we are all just waiting to die.

We are all waiting to die.  Gotta hit a balance, save some, spend some and enjoy.  There are many things you can't change unfortunately and many things you don't know.  I don't expect to live all that old, but saving for my family is a good reason to set aside.

To start with, since I could see what I said as being easily seen that way (and if it was, I apologize), I wasn't taking aim at you or your statements so much at my own frustration at how the systems have changed.

I do not have all the answers and I very much doubt anyone does.  That said, some of my observations:
-Have a savings account for emergencies.  This exists to hedge against uncertainties and help prevent someone from having to take out unexpected loans or dip into their retirement funds.
-Do not plan on your savings account as part of your retirement.  It's a bad investment and doesn't keep up with inflation let alone give you anything in return.  It's there as a rainy day fund, nothing more or less.
-Figure out how much money you can live on at the absolute minimum (cut the luxuries out as well) at your anticipated retirement age.  This is not your goal to shoot for; it is to give you an understanding at what you can survive at.
-Determine what living standard you will be satisfied with after retirement.  This is what you should be aiming for and shouldn't be extravagant.  
-Anticipate living longer than the average.  You don't want to reach 80, run out of money and still be alive but with significant medical expenses.
-Speaking of medical expenses, your retirement plan should account for health insurance and rely on govt medical care as little as possible (never know when it may go away).
-Your employer's retirement benefit should be a major selling point on if you work for them or not.  If its weak, find somewhere else.
-Even if you have some incredible 401k plan through your employer, you should have a separate investment strategy elsewhere.  Preferably more than one.  Once again, you never know when one of them will evaporate due to mismanagement or corruption.
-Find something you enjoy doing that can also make you money on the side if you are still able to do it.  It gives you a purpose and brings in a little more play money.  I've seen so many people retire and then die months later because they had nothing left to really work toward.  This at least fills that niche in a rewarding way.
-Roth vs traditional?  Roth.  How often does anyone see taxes going down?  Almost never.  Better to have your taxes be taken now than hope on some small chance that a miracle happens.
-Have as comprehensive of documentation as possible in regard to late life care.  This includes powers of attorney, trusts (as you mentioned), a will, etc.  Once these are done, do not just forget about them.  Things may change over time and these documents need to do so as well.

I am no expert, and these are just the things off the top of my head mostly from some of my own research and pitfalls I've seen others step into.  Bottom line, getting some form of personal finance education (self-taught or otherwise) is one of the biggest returns on investment one can get in life, do not put all your eggs in one basket, and if the govt is involved anywhere do not assume it will be there when you need it.

No offense taken! I have enjoyed your contributions to this thread and was a little confused at that post so was hoping you could elaborate some more!

All very good ideas/recommendations. Like it a lot. Thank you!

So often people get very personally “offended” when someone suggests they need to plan better for retirement. I think we have seen a little of that in this thread. Occasionally I read comments in the Team forum or see a link to a GD thread talking about retirement and when I read those threads, there is always someone with a defeatist attitude who decides to get angry with posters in the thread. Kind of like how polarizing a guy like Dave Ramsey is on this forum. I’m not a devout Dave Ramsey follower and have no problem saying I don’t think his financial strategies are for everyone….but at the same time I have seen many people I know who didn’t make good financial decisions use his principles to get out of crushing debt and onto far better financial footing. Many people don’t like his religious approach so they discount his financial advice.

I like to read a variety of opinions and glean what will benefit me from each one of them. So often, when listening to someone, they say something we disagree with so we discount everything else they have to say. There are a few YouTube channels I like to watch (wide range of topics). Every so often the channel posts a video I either don’t agree with or don’t care for. Instead of throwing out the whole channel, I just shut off that video and go on to something else.  

There is no one financial plan that works for everyone. But we might be able to put parts of a bunch of plans together and make a great plan for ourselves.

Frozenny has posted a lot of good financial posts in this forum in the past and every one of his posts have given me good financial  ideas but many of his posts don’t get a lot of responses.  But, it’s a lot more fun to talk about buying the latest and greatest gadget than to talk about money or to plan for retirement! I’m actually surprised this thread has as many responses as it has!

Add a long-term care insurance plan to your list of expected retirement expenses.  https://www.nerdwallet.com/article/insurance/long-term-care-insurance

 Spot on

I had intented to cover that in the health insurance part, but yeah that very much does in fact warrant being called out seperately.  

I remember when I was much younger (for some reason ive got a much better memory than it seems others do) and I can remember our elementary school taking us to the nearest VA on veterans day.  While I was your traditional dumb kid and didnt pay as much attention as I would have when I got older, one thing I look back on is seeing the number of older folk who were grateful just to have someone visit them and to talk to.  Most had outlives their spouses and many had outlived their children.  Nobody was there because that was their prefered retirement plan.  They just didnt have any other choices left, and even at that its not an option available for most people.  Many had outlived their own retirement plans or had their plans fall apart.

My point there is that no matter how much ones family may care for them, a day may come where you have nobody left and no way to earn your own income or even be able to live independently.  That is also something that should be hedged against as part of a retrement plan.  Chances are depressingly high that a individual will outlive their own ability to be independent, and nobody wants to spend their remaining years feeling like a burden on those around themselves.

Food for thought:

https://www.usatoday.com/story/opinion/voices/2023/05/28/inflation-government-spending-are-pulling-boomers-out-of-retirement/70254240007/


Reckless spending and inflation are forcing many Americans to 'unretire'


Older Americans are increasingly ‘unretiring’ to deal with elevated prices and rocky financial positions. Unfortunately, financial insecurity from inflation may be here to stay.

Rising costs have turned grocery staples like eggs into luxuries for many people on a fixed budget. Prices seemed to be coming down, but recent data signal that the end of elevated inflation remains elusive. The consumer price index (CPI) rose 4.9% in April from a year prior. This is below the generational high of 9.1% in June 2022. However, overall CPI was flat from March after months of slowing price increases.

Shelter prices are up 0.4% from the last month, with overall housing costs at 8.1% higher in April compared to a year earlier. Shelter, which is responsible for a third of CPI weighting, was a key factor driving CPI higher despite declines in other categories.

Unlike other discretionary spending, housing is not optional. Increasingly, Americans are spending more on rent, and this disproportionately impacts low-income people and older adults, especially those on fixed budgets. Nearly 10 million households headed by people aged 65 or older pay more than a third of their income on housing, and half of these pay more than 50%. Renter households tend to have lower incomes than owner households and are more affected by income and rental price changes.

Un-retiring to grapple with inflation

An average of 10,000 Baby Boomers reach retirement age each day. Unfortunately, the inflation-driven affordability crisis and the Federal Reserve’s interest rate hikes meant to combat inflation have driven housing costs higher. As a result, retirees are moving back into the labor force. According to a survey by Paychex, 55% of retirees who went back to work said they did so because they needed more money, and 1 in 6 retirees is considering returning to work.

Their work ethic is welcomed by employers, and their presence may alleviate worker shortages. However, postponing or ending retirement is a hard choice to make.

Savings and investments should be a cushion for retirees even through difficult periods. Many older adults find themselves in deteriorating financial positions due to massive stock market losses in 2022. Some $12.2 trillion in wealth was wiped out as the Dow, S&P 500, and Nasdaq lost 8%, 19.4%, and 33%, respectively. In an AARP survey late last year, more than a third of people 65 and older described their financial situation as worse than a year prior — up from just 13% at the start of the year. While large shares of Americans across age demographics expressed financial struggles, older Americans were more pessimistic about conditions improving for them in the future.

Social Security and Supplemental Security Income (SSI) benefits increased by 8.7% — more than $140 per month — at the start of the year. While that’s a little extra breathing room, the extra social security dollars are not enough.

The cost of bad policy in the Biden administration

People have connected the dots between ill-advised government policies and harsh economic outcomes. Spending nearly $2 trillion dollars on government transfers to nearly every household at a time of supply-chain disruptions and exacerbated labor shortages caused inflation to accelerate. Putin’s invasion of Ukraine and other production disruptions worsened it.

The Biden administration and congressional Democrats passed a climate change bill that they falsely labeled the Inflation Reduction Act in hopes of fooling Americans, especially seniors. The bill never addressed rising food, housing, or energy prices — the most basic and critical needs of households. Any climate savings would take years to come to fruition and could be offset by new costs for households — tens of thousands of dollars — on new electric vehicles. Meanwhile, the green subsidies cost more than three times what the law’s supporters claimed.

Reckless federal spending triggered inflation to skyrocket. Anyone promoting an agenda of inaction on government overspending, especially during debt ceiling negotiations, isn’t helping seniors, but contributing to their hardship.