You May Never Retire!

One in five Gen-Xers have resolved themselves to a future in which they may never be able to retire. That future may apply to Millennials and even some Boomers, too.

With Social Security not coming anywhere near keeping up with real inflation because the government does not account for real inflation, the amount of retirement Social Security funds buy you is a shrinking piece of the pie every year. Inflation makes retirement less affordable under any and every retirement plan. It is a Federal-Reserve tax against your retirement funds, created to help the government with its own funding needs.

By way of example, Florida, long a popular retirement state, is now seeing an exodus of retiring residents as retirement has become “unaffordable in 20 Florida small towns” due to escalating costs.

Florida has long been a popular retirement destination for those seeking a sunny climate, low taxes, and a reasonable cost of living.

Retirees look to the Sunshine State for its sprawling golf courses, sandy beaches, and the company of retirement communities.

However, the post-pandemic era has seen property prices spike and the cost of living in Florida rise significantly.

We’re not talking the big, expensive cities like Miami here. We’re talking small-town panhandle locations that the average Joe or Jolene could once hope to retire in. Property prices are still actually quite cheap in those towns compared to many parts of the country; but those who retired there because that was all they could afford are now finding even that unaffordable. Home insurance, if you can get it, has particularly become a staggering cost. Even car insurance, according to the Insurance Information Institute, has risen 24% just since 2023!

That is just one popular retirement state as an example, but the problem is much larger than that.

With almost a quarter of Gen-Xers saying they will never retire, one has to wonder how much longer they will want to keep funding Social Security, as they increasingly acquire the reins of political majority power if it is not working for them. Social Security could, of course, be completely saved immediately by just ending the tax cap that protects only the wealthy; but you hear almost no talk of that highly realistic option. It is apparently better that most of us pay the tax on all of our income, while the 1% pay it on only a small fraction of their income. To do otherwise would be robbing the rich by not letting them have that tax shelter covering most of their income.

The fact is, many people have not been able to lay away their own retirement plans in 401Ks either—not to a large enough extent to fully retire on anyway. That’s because most of America has been living hand-to-month, month-to-month for many years now. They have not seen themselves as having the cash flow to be able to lay away much of their income. (And then what happens if a stock market crash strips half of it away right when you retire? I’ve known people who happened to in the dot-com bust who sold their family carpet-laying business and then had to go to back work in a fast-food restaurant because their retirement was suddenly cut in half.)

Here is the gist of it:

For many Gen Xers, the path to retirement feels like a solitary journey. In fact, 73% of American Gen Xers believe funding their retirement is increasingly their own responsibility, as opposed to public and private pensions. As a result, many Gen X are preparing for the possibility of having to delay or make significant adjustments to their retirement plans: 

• Gen Xers anticipate needing to work longer, in spite of fears that they may not be able to (due to layoffs, forced retirements, etc.): 46% of American Gen Xers accept they may have to work longer, and 30% worry that they will be forced to return to work after retirement. 30% are worried they won’t be able to work as long as they would like. 
• Dwindling benefits due to public debt is a major concern: 75% of American Gen Xers are worried that increasing public debt will result in reduced retirement benefits….
• Gen X fears healthcare costs will destroy their retirement savings: Over a third (34%) of American Gen Xers worry that they'll go broke trying to cover healthcare costs in retirement.

And then look at the huge cost of retirement facilities. Who can afford to get old when the cost of living goes up so much specifically for the elderly?

So, many of us, including Boomers like me, anticipate we may have to, at least, supplement our retirement pensions and funds with part-time work well into our seventies or eighties if we are able. We could, of course, just stop giving the top 10% a free ride on the vast bulk of their income—a break the rest of us don’t make enough to qualify for. Let’s see that go on the party platforms this year.