Is inflation killing America’s retirement dream? Four out of ten investors say rising prices have destroyed their plans for their final years.
Four in ten investors say inflation is killing their retirement dreams, a landmark new survey reveals.
THE Natixis Global Retirement Index found that rising prices were the biggest threat to investors – retired and working – behind fears of a recession, war and high interest rates.
Experts say the world is in the midst of a “money tsunami” – a rapidly aging population putting increased pressure on individual economies.
Soaring gasoline prices pushed the annual inflation rate in the United States to 3.7 percent in August, according to new figures revealed today.
This is the second consecutive month that prices have increased, although the rate remains well below the peak of 9.1% reached last June.
The Natixis Global Retirement Index found that rising prices were the biggest threat to investors – retired and working – behind fears of recession, war and high interest rates.
The crisis opened investors’ eyes to the threat of inflation after years of relatively stable costs.
Natixis spoke with 750 American workers for this survey. All respondents had at least $100,000 in investable assets.
Yet 47 percent worry they won’t have enough money to enjoy retirement, while 31 percent worry they’ll never save enough to retire.
Inflation often poses a greater threat to unemployed people because they have fixed incomes and do not have the ability to change jobs for higher wages or negotiate salary increases.
Dave Goodsell, executive director of the Natixis Center of Investor Insight, told Bloomberg: “The sharp rise in inflation will hit people hard, and they will experience a lot of lingering financial trauma.
“For people on fixed incomes, these spikes in food and energy consumption have forced them to make difficult choices.”
Inflation in the United States accelerated for the second consecutive month, reaching an annual rate of 3.7 percent, up from 3.2 percent in August.
Analysts say the rise is driven by a few select commodities such as gasoline and housing – which are notoriously volatile – while the majority of prices have remained stable.
Overall, America ranks 13th out of Natixis’ top 25 countries in financial security in retirement. This represents a drop of two places for the United States, which was in 11th place in 2022.
Switzerland comes in first place, followed by South Korea, Australia and Singapore.
This comes after figures from the US Bureau of Labor Statistics released today showed that the annual inflation rate is now hovering at 3.7 per cent, well above the 2 per cent target rate of the Fed.
Rampant inflation sparked an aggressive interest rate hike campaign by the Fed, which saw rates rise from near zero to their highest level in 22 years.
Despite the latest rise in inflation, the central bank is expected to keep interest rates steady while deciding whether another rate hike later in the year will be necessary to combat inflation.
Core inflation, which excludes volatile prices including food and energy, and is considered a better indicator of long-term trends, remained generally subdued.