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No retirement savings

Older Americans are experiencing a “crisis of confidence” with regards to their financial security, according to Indira Venkat, SVP of research at the American Association of Retired Persons (AARP).

It’s understandable given how high inflation has soared in recent years, driving up costs for essential items like groceries, home and auto insurance, utilities and health care.

One of the more significant cost-of-living pain points at the moment is the price of housing. The average 30-year fixed mortgage rate is hovering between 6% and 7%, which is a tough financial burden to bear, especially for those (like Campbell) on a limited retirement income.

Living in such challenging economic times, it is unsurprising that one in four U.S. adults over age 50 expect to never retire and 70% are worried prices are rising faster than their income, according to an AARP study.

“Among adults yet to retire, one in five have absolutely no retirement savings,” Venkat told CBS Chicago, citing three reasons behind these trends: the lingering effects of inflation, the price of housing and a rise in debt levels. Campbell had no other option but to return to work — and she’s not alone in this.

According to a recent survey of U.S. seniors between the ages of 62-85 by Indeed Flex, almost one in three retirees are considering temporary work and un-retirement, primarily due to inflation’s impact on their retirement savings.

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Get back on track

If you find your retirement income — whether you’re living off a pension, Social Security, your savings, or all of the above — does not meet your needs, there are ways to get back on track with your finances.

One option is to follow in Campbell’s footsteps and continue working, perhaps in a part-time or hourly position. To succeed in the job market as a senior, you may need to update your job skills, build out your network and seek employment that is kind to an aging body.

If you physically cannot or do not wish to continue working to bring in some extra income, you may need to find ways to reduce your living expenses. This might mean downsizing your home and moving to a cheaper area, spending less money on transportation and buying less-expensive food.

You may also be eligible for some helpful tax incentives, like the Saver’s Credit and retirement saving catch-up contributions.

If the size of your nest egg is a real concern, you may want to seek advice from a financial adviser who can help you to figure out a budget and a strategy that allows you to enjoy your golden years even if money is tight.

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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.

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