Many Americans of retirement age plan to continue working in 2024, and others who have retired are planning to “unretire,” primarily for financial reasons, according to a recent survey.
In a ResumeBuilder.com survey of Americans aged 62-85, 76% of the respondents were retired, 17% were working full-time, and 7% were working part-time. Among the group of working older Americans, 25% said they had retired at one point and later returned to the workforce, while the remaining 75% said they had never stopped working.
The majority (61%) of those who “unretired” did so in 2020 or later, and 45% said they returned to the workforce due to inflation and the high cost of living.
In addition, 12% of retired workers plan to return to work in 2024. Of this group, 61% said that inflation and increased cost of living were the main reasons for rejoining the workforce. Other reasons cited were not having enough saved for retirement (34%), to help pay debt (34%), and to help combat boredom (34%).
“Soaring inflation over the past two years has deeply weakened the buying power of Social Security benefits, particularly for the oldest and disabled adults who have received benefits the longest,” according to a report by Mary Johnson, a Social Security analyst with The Senior Citizens League.
“This latest research on the buying power of Social Security benefits finds that older adults who retired before 2000 (now age 85 and older) have lost 36% of their buying power and would need an extra $516.70 more per month ($6,200 more in 2023) than they are currently getting to maintain the same level of buying power as in 2000.”
The annual cost of living adjustments (COLA) built into Social Security benefits have not kept pace with the rising cost of goods and services most frequently purchased by senior households.
“Between January 2000 and February 2023, Social Security COLAs increased benefits by 78%, averaging 3.4% annually. But the cost of goods and services purchased by typical retirees rose by 141.4%, averaging about 6.2% annually over the same period,” said Johnson.
The reason for the discrepancy is that the Social Security COLAs are based on the Consumer Price Index (CPI), which does not accurately reflect the typical costs incurred by retired persons over age 62. Most Social Security recipients spend a greater share of their incomes on housing and medical costs, two categories that tend to increase more quickly than overall inflation.
Social Security and Supplemental Security Income benefits will increase by 3.2% in 2024, per Fox Business. However, if the COLA increases were based on a “senior” CPI that reflected how older Americans spend their income, that increase would be almost a full percentage point higher — around 4%, according to Johnson.
Only 8% of older persons who are currently working plan to retire next year, according to the ResumeBuilder survey.
