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Published: May 29, 2024 3 min read
An elderly couple facing back towards paths of footsetps.
Money; Getty Images

Nearly a third of retired Americans are thinking about going back to work as the high cost of living eats away at retirement savings.

Following three years of elevated inflation, 30% of retirees say they are considering working a temporary job (between one and three shifts per week), according to a new report from Indeed Flex, a job search app. Many of these people are worried about outliving their retirement savings.

“Increased cost of living is the driving force behind why the aging population is considering un-retirement,” Indeed said in the report, noting that 71.6% of retirees cite inflation as the reason that going back to work is on their mind.

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Even though inflation has cooled to an annual rate of 3.4%, down from the peak above 9% in June 2022, just about everything costs more than it did in 2021 when prices started spiking. The jump in the cost of living has been large enough that many older Americans who thought they were financially prepared for retirement are now reassessing if that’s actually the case.

Other reasons retired adults are considering temporary work include: personal fulfillment/keeping busy (39.7%), desire for social interaction (35.8%) and insufficient savings (20%).

Inflation stresses retirees’ budgets

The latest data from Indeed confirms what several other studies have found in recent weeks: The high cost of living is stressing retirees’ budgets.

Investment management firm Schroders reports that only 44% of retirees think they’ve saved enough for retirement and another 24% are unsure. Meanwhile, 89% of retirees are worried — or at least slightly concerned — about inflation lessening the value of their assets

While Social Security benefits are annually adjusted for changes in the cost of living, retirees also rely on other income in retirement — like 401(k) withdrawals or fixed-income savings — that can be negatively affected by inflation, meaning the money doesn’t go as far as anticipated.

More than 20% of retirees and near-retirees increased their retirement account withdrawals between 2021 and 2023 because of inflation, according to a report from economists at the Center for Retirement Research at Boston College. The average increase in withdrawals among this cohort was $3,620 over those two years.

“A bout of high inflation later in life is generally harmful to financial well-being,” the Boston College economists wrote. “Older households have just had a sharp reminder that inflation may not be stable throughout retirement.”

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