By Alice Seeley

The BMO Real Financial Progress Index, a quarterly survey of more than 3,400 adults, found that inflation and rising consumer costs are affecting Americans so severely that a quarter of Americans will need to delay their retirement to account for the reduced savings.

Since President Joe Biden took office, prices of goods and services have skyrocketed, with the Bureau of Labor Statistics (BLS) reporting the highest inflation rate in four decades.

“The all items index increased 8.3% in the 12 months ending in April, a smaller increase than the 8.5% figure for the period ending in March,” BLS noted. “The all items less food and energy index rose 6.2% over the last 12 months. The energy index rose 30.3% over the last year, and the food index increased 9.4%, the largest 12-month increase since the period ending April 1981.”

“Prices across the board – from cars and gasoline to groceries and other everyday essentials – are rising at the fastest pace since the 1980s,” The director of consumer strategy at BMO Harris Bank, Paul Dilda, stated. “We haven’t seen this level of inflation in a very long time, and it’s very daunting.”

Dilda added that many Americans did not account for this rise of inflation in their financial plans, which has thrown off their budgets and timelines.

According to the BMO survey, this record-high inflation has resulted in 36% of Americans reducing their savings, and 21% are putting away less for retirement to keep up with growing expenses. Chris Motola, a financial analyst at Merchant Maverick, said, “inflation tends to hit savers hard by directly reducing the value of their savings.”

“You have a generation of people who built up savings expecting it to last X number of years after they retire,” Motola said. “High, unexpected inflation changes the math entirely. The money that was supposed to last you until the end of your life is looking like it will run out well before that.”

To handle inflation, the BMO recommended working with a financial expert to ensure one’s savings and spending goals are still on track.