Today’s inflationary environment is causing some to delay retirement plans.
The latest research from Empower finds that considering the current economic environment, more people estimate delaying their expected retirement by three years, for an average age of 63. This number drops a full five years further for those without a financial plan whatsoever.
Gen Z workers plan to retire the earliest out of all respondents, at age 54. However, this is still five years older than their initial plan of retiring by 49.
Respondents say that economic pressures including inflation (81%), rising costs (81%), interest rates (66%), and student loans (32%) are contributing to their fears, especially as 54% are currently carrying debt while 36% cannot handle an unforeseen expense over $500 without any real worry.
As a result, 67% of Americans say their income isn’t keeping up with inflation, and 42% say their standard of living is declining. It’s probably why three in four Americans are more content and satisfied at work (68%) and with their relationships (72%) than with their overall wealth.
Can money buy happiness?
It’s a question asked time and time again, and now participants have an answer: Yes, it can. Six in 10 Americans, including 72% of Millennials and 67% of Gen Z respondents, say money could buy their happiness, with a specific price tag of $1.2 million.
Furthermore, the average words that come into mind when thinking about financial happiness include freedom, security, and relief.
Seven in 10 respondents believe that increased financial resources could help delay retirement by solving most of their problems. For 32%, an additional $15,000 could significantly delay their retirement by making a meaningful impact in their lives. Forty-two percent feel that a $25,000 increase would substantially contribute to postponing retirement, while 17% consider a $5,000 boost a major aid in their financial planning towards a later retirement.
Financial freedom and independence are linked to this happiness, finds Empower, with a majority who believe they’ll feel secure when they don’t have to rely on anyone else financially (87%), can withstand financial needs (87%), or are able to financially take care of loved ones (84%).
Retirement security in advice
The findings go back to the idea that having a financial plan can significantly improve wellbeing, as those with a detailed financial roadmap were about three time as likely to report greater happiness, including goal setting, net worth, and financial allies.
In response to the need to delay retirement due to inflation, an increasing number of employees are seeking assistance from their employers, particularly for retirement planning. With 37% prioritizing retirement savings as a key goal and 67% feeling that employers should offer financial planning support, including 401(k) advice, to help delay retirement, the demand for financial coaching is evident. Three-quarters of workers express a desire for such guidance to alleviate financial stress.
However, 43% feel that access to advice is beyond their reach, and 57% say they wished they had gotten financial advice sooner.
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