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The Financial Outlook for Baby Boomers Approaching Retirement

Key Takeaways

As Baby Boomers near their full retirement age by the conclusion of 2025, a notable trend emerges: only 10% of this demographic has fully retired. The escalating cost of living has prompted many to reassess their retirement plans, with some contemplating rejoining the workforce to supplement their retirement income amid rising expenses.

Many Baby Boomers are navigating a complex financial landscape as they reach retirement. The increases in living expenses, housing prices, and healthcare have compelled several individuals to either postpone retirement or consider returning to work.

Approximately 60% of Baby Boomers, individuals born between 1946 and 1964, are on track to receive their full retirement age (FRA) Social Security benefits by year-end. Despite this, a mere 10% are currently in full retirement, according to a recent survey conducted by Indeed Flex, an online platform for temporary job placements.

Additionally, a significant number of Baby Boomers plan to continue working in 2025, with nearly half expressing this intention, while 35% remain uncertain about their retirement plans due to the persistently high cost of living.

The Consumer Price Index (CPI), particularly for those aged 62 and older, has seen a notable increase. By January 2025, the CPI for this age group rose by 3.1% compared to the previous year, surpassing the overall CPI increase for all Americans by 9.3%. This trend is particularly concerning for those nearing retirement age.

Critics have raised concerns over the annual Cost of Living Adjustments (COLA) provided by Social Security, arguing that these adjustments have not kept pace with inflation. Experts warn that the current lag could lead to a significant decrease in retirees’ purchasing power. Furthermore, the long-term viability of Social Security itself is in jeopardy, raising fears that it may not be able to deliver full benefits to retirees in the future.

Novo Constare, CEO and co-founder of Indeed Flex, highlighted the financial challenges faced by today’s retirees, emphasizing that many lack sufficient savings for a secure retirement. He noted that while previous generations often relied on pensions and more affordable living costs, contemporary Baby Boomers find themselves in a situation where Social Security may not suffice to cover their essential expenses.

To mitigate the financial strain from escalating living costs, nearly a quarter of retirees are contemplating the possibility of unretiring. Many are considering temporary positions to generate additional income, which could help fund vacations, gifts, or simply enhance their social engagement, as indicated by the findings from Indeed Flex.

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