Most Americans over 50 don't think they'll ever retire, new study finds

Millions of Americans are losing hope of ever retiring.

According to a new survey by the nonprofit AARP, 61% of Americans aged 50 and up think they won’t have enough money for retirement.

“Among retirement savers who are 50 and over, there’s a growing number compared to last year that don’t expect that they will save sufficiently if they continue at the current rate that they save,” said Indira Venkat, senior vice president of research at AARP.

These figures should be a “wake-up call” for younger Americans who aren’t taking retirement savings seriously, she said.

One of the reasons for the perceived savings shortfall is that older workers don’t have access to retirement plans, which makes it easier to stow away cash every month.

As Creditnews reported, younger millennials have become more retirement-ready than older generations because they entered the workforce when defined contribution and 401(K) match plans were in vogue.

With the burden of retirement planning shifting to employees, millions of private-sector workers simply haven’t kept up, Venkat explained.

Inflation is another roadblock for those scrambling to save for retirement.

According to AARP, more than 70% of survey respondents said they’re worried about prices outpacing their income. And they have good reason to believe so.

Inflation: The silent killer

Most retirement savers think about inflation in terms of rising prices, but that’s only part of the equation.

On the flip side, inflation is a decline in purchasing power, meaning the dollars in one’s bank account can purchase fewer goods or services over time.

While inflation has always been a cause for concern, the pandemic made it particularly troubling.

According to government data tracked by Statista, inflation, as measured by the Consumer Price Index, far exceeded average wage growth during the pandemic.

Based on at least one government indicator, consumer prices have grown by more than 20% since 2020.

High inflation makes it much harder for Americans to plan out how much money they’ll need when they retire 10, 20, or 30 years from now.

“Inflation is the silent killer,” said Brad Lineberger, president of Seaside Wealth Management, in reference to retirement planning.

“It can erode purchasing power to the point where someone wakes up and can’t live the lifestyle they once did because they can’t afford to.”

Given the uncertainty around inflation, Americans are at a loss for how much money they’ll actually need to make ends meet in retirement.

Citing a Northwestern Mutual study, Creditnews reported that the average American believes they need $1.46 million to retire comfortably.

The problem is that most are $1.37 million shy of that goal when they finish working.