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High Inflation Pushing Retirees Back Into the Workforce

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Since the beginning of 2022, many Americans have been returning to the workforce due to a massive rise in prices due to high inflation.

During the pandemic, millions of Americans quit their jobs, or were fired due to the lockdowns, or retired early, in what came to be known as the “Great Resignation.”

After the economy started to recover last year, the labor market started to tighten, some gave up working altogether, while 47.4 million other people left their jobs for better opportunities, a record high, according to data from the U.S. Bureau of Labor Statistics.

Meanwhile, employers were forced to increase salaries, offer signing bonuses, and allow employees to work at home in order to retain or recruit talent, as labor shortages grew nationwide.

However, the spike in salaries and bonuses has not kept up with the rise in inflation.

At the same time, the present economic situation regarding the rising cost of living is leaving many on fixed retirement incomes increasingly rethink their decision to leave work.

Recession Predicted

U.S. inflation is at a near four-decade high, at 8.5 percent, down from the high of 9.1 percent in June, which has provided little relief for consumers.

More economists are predicting an imminent recession, after U.S. GDP contracted for two straight quarters, while the housing market has tumbled, a sign that general economic growth has tumbled.

Core inflation dipped for a bit, only to accelerate again in recent months, and even if price increases continue to slacken, they are a long way from the Federal Reserve’s annual inflation target of 2 percent.

Twenty dollar bills are counted
Twenty dollar bills are counted in North Andover, Mass. (Elise Amendola/AP Photo)

A least 68 percent of people who retired during the pandemic have admitted that they would consider coming back to work, according to a June CNBC survey.

The survey also reported that 94 percent of those who left the workforce but never technically retired would do the same.

It also found that that 33 percent of retirees left the workplace for health reasons, 27 percent retired due to pandemic concerns, while 19 percent said that they no longer wanted to work.

Many retirees are now saying that they are feeling anxious after spending decades in the workforce or running a business, according to Michael Liersch, the head of wealth and investment management advice and planning at Wells Fargo, in an interview with FOX Business.

“Any type of change that you make can be perceived as a loss because you’re giving up something to go to something else,” said Liersch.

The fear of a looming recession is also making many retirees look at their retirement stock portfolios with dread.

“If you are paying 2.5 percent or even more in ongoing fees, it’s like punishing your retirement pot with a double dose of inflation,” said Robin J. Powell, The Evidence-Based Investor.

Many Americans over the age of 55 and over, including many early retirees, are now streaming back to find work or have found work in growing numbers, higher than the pre-pandemic average, according to the St. Louis Fed.

About 3.2 percent of workers who retired a year earlier are now employed as of July.

From 2017 to 2019, about 3 percent of retired workers on average had a job a year after their official retirement.

Some retirees, according to Liersch, have decided to go back full time, either with their old firm or a new one, although some returnees may be “leveling down” their status with their former employers, such as doing hourly consulting work.

An estimated 1.5 million would-be retirees have already returned to the workforce, according to Labor Department data.

The present rate at which retired employees are returning to work remains elevated, said Nick Bunker, the head of economic research at Indeed, to FOX Business.

The Labor Department reported last week that U.S. employers added 528,000 jobs in July, higher than expected, while the U.S. unemployment rate fell to 3.5 percent last month, the best level in about half a century.

Bryan Jung

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Bryan S. Jung is a native and resident of New York City with a background in politics and the legal industry. He graduated from Binghamton University.





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