Inflation and fears of a recession are just some of the economic challenges many Utahns are facing. It’s been especially hard for some older adults on the cusp of retirement or recently retired, who are now having to go back to work.
“It's really boiling down to a matter of hard economics,” said Mark Knold, chief economist for the Utah Department of Workforce Services. “This high gasoline, high inflation, cutting into my cost of living and making it harder to make ends meet … I think [it] is actually behind this rapid participation rate increase that we've seen here in just the last couple of months.”
During the pandemic, lots of people had the luxury of sitting on the sidelines, Knold said. A large swathe of adults over 50 took early retirements, perhaps due to concerns about COVID-19 or being in good financial shape.
As the cost of living increases, so too is the number of older adults returning to the workforce. Knold said the labor force participation rate — a measure of the number of adults working or looking for work — is up nearly 2% from a year ago for those over 55. That’s compared to about a 1% increase for the whole state.
Some of the growth may be a natural return, Knold said, as people are likely less worried about the virus or are finding a more flexible work arrangement. Undoubtedly, finances are still a huge concern according to Alan Ormsby, state director of AARP Utah.
A recent national AARP survey found that fewer than one in five adults are “very confident” they’ll have enough money to last through retirement. More than half — 57% — who suffered a setback in their employment during the pandemic also said their situation is worse today.
About a quarter of Americans need to delay retirement due to inflation, according to another poll from BMO Harris Bank.
“Especially right now, if the stock market was the primary place that you've had your money, that's a really devastating thing to open that 401k and see tens of thousands of dollars of loss in the last several months,” Ormsby said. “I think the most important thing is [that] people need to not panic.”
It may be worth a visit to a financial planner, he said, but in general, it’s probably not a good idea to make big changes to any long-term plans. Still, they may need to make some hard choices about how they’re spending. Beyond the cost of gas and housing, Ormsby said older adults are also struggling to pay for prescription medications, some of which cost 300% more than they did a decade ago.
He recommends that anyone who is struggling reach out to their local aging agency. There is one in every county in the state. They can help connect people to resources, such as a stipend for volunteer work or discounts on things like food and medications.
