(Bloomberg) -- Almost half of affluent investors in the US say inflation is “killing their dreams of retirement,” according to the 2023 Natixis Global Survey of Individual Investors.
Even though the rate of inflation has cooled since hitting a four-decade high in mid-2022, 84% of respondents said the surge in recent years woke them up to just how big a threat inflation is to future income and savings. Many of those surveyed, all of whom have at least $100,000 in investable assets, fear they won’t be able to work long enough to overcome the hit to their finances and their retirement plans.
“The big spike in inflation hit people hard, and they have a lot of lingering financial trauma,” said Dave Goodsell, executive director of the Natixis Center for Investor Insight. “For people on a fixed income, those spikes in food and energy forced them to make some hard choices.”
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While inflation was seen as the greatest investment risk, 77% of Americans said they also worry that high levels of government debt could bring cuts in Social Security benefits. Just under half said that benefit cuts are their greatest retirement worry, and a little more than half said cuts would make it hard to manage financially.
Hard to Save
Saving more to combat inflation isn’t an option for many, with about two-thirds saying higher prices made it “significantly” harder to save for retirement, according to Natixis. A majority of workers said they’ll have to work longer than expected, and 38% fear they won’t be able to work as long as they want to. On average, retired workers in the survey said they left the workforce four years earlier than planned, at age 61.
As it is, over 40% of the Americans said they expect to have to live frugally in retirement, and about 30% said that to make ends meet, they’d need to turn to friends and family. About a third figured they will have to move somewhere with a lower cost of living to afford retirement.
The findings released Wednesday from the survey — which spoke to 750 working Americans in March and April — were included in the release of Natixis’s 2023 Global Retirement Index.
To contact the author of this story:
Suzanne Woolley in New York at [email protected]