Americans' finances are being squeezed as inflation pushes up prices on things such as rent, groceries and gasoline.
As a result, one-quarter of Americans will have to delay their retirement, according to the BMO Real Financial Progress Index, a quarterly survey conducted between March 30 and April 25.
Putting off retirement plans is mostly due to disrupted savings from increased prices, the survey found. Thirty-six percent of survey respondents have reduced their savings and 21% are putting away less for retirement in order to keep up with growing costs, according to the survey.
"We haven't seen this level of inflation in a very long time, and it's very daunting," said Paul Dilda, head of consumer strategy at BMO Harris Bank. He added that many people in or near retirement may not have considered this surge in prices in their financial plans, which has thrown off budgets and timelines as well.
Younger Americans have been the most adversely affected. More than 60% of those ages 18 to 34 said they had to pull back savings contributions to make up for rising costs of necessities.
In addition to grappling with higher prices on nearly all goods and services, Americans are facing a volatile stock market that may have also contributed to shifting retirement timelines.
So far this year, the S&P 500 has shed more than 12%, a stark contrast from the previous year's gains.
"It's difficult to save, and these times are making it even more difficult," said Dilda.
Seeking financial advice
The good news is that people are actively making changes to their budgets to combat rising prices.
This includes changing how they shop for groceries, what subscriptions they pay for each month and even how they vacation for the time being, the survey found.
Americans are also planning more than they were before inflation spiked, according to the report. This quarter, more Americans are setting yearly budgets, writing down a financial plan to follow and meeting with their financial advisors monthly.
"We're seeing a lot of people taking those actions so that they can continue to enjoy the life they want and at the same time be able to save or manage their budget accordingly," said Dilda.
There's also been an uptick in people looking to professional investment advice. In the latest survey, 55% said their bankers were crucial to helping them meet their financial goals, an increase of 5 percentage points from the previous quarter, and 52% said the same of their financial advisors, a jump of 6 percentage points.
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