Most Americans surveyed said that running out of money in retirement was their biggest concern, even more than dying. According to a recent study conducted by Allianz Life,* people who are nearing or have reached retirement are extremely worried about economic uncertainty.
Sixty-four percent of respondents said they are more terrified of running out of money in retirement than they are of dying. This trend has continued and gotten worse since Allianz Life started surveying Americans on the topic in 2022. The situation is particularly urgent right now, said Kelly LaVigne, VP of Consumer Insights at Allianz Life. “The risk is much higher right now than it has been for quite a while,” LaVigne said.
Inflation, Taxes, and Social Security Fuel Financial Anxiety
Americans’ worries about running out of money in retirement are a result of several economic factors. The level of persistent inflation is at its highest. High inflation was cited by more than half of the respondents (54%) as a primary cause of financial stress. The cost of necessities keeps rising, straining household budgets and decreasing the ability to save, even though inflation has declined since its peak in June 2022.
Social Security is a significant additional concern. A lot of Americans worry that they won’t get enough money each month to sustain themselves when they retire. In fact, 43% of respondents expressed doubt that they would receive the necessary financial support from Social Security. Furthermore, 43% of those surveyed claimed that their anxiety was exacerbated by high taxes.*
Sixty-one percent of baby boomers said they were concerned about rising costs, making them the generation most susceptible to inflation. By contrast, 56% of millennials and 55% of Generation X agreed.*
Gen Xers Are the Most Concerned About Financial Security
All age groups have concerns, but Gen Xers, or people between the ages of 45 and 60, were found to be the most worried about running out of money in retirement. Surprisingly, 70% of Gen Xers worry about running out of money before they pass away. The same fear was also reported by 61% of boomers (those between the ages of 61 and 79).
Gen Xers are experiencing stress as retirement draws near due to growing living expenses, unstable markets, and doubts about Social Security’s long-term sustainability. Furthermore, despite being in their retirement years, baby boomers still face significant financial obstacles that make long-term planning difficult.
According to LaVigne, the average American’s retirement income is normally 40% covered by Social Security. People will therefore probably need to rely on other revenue streams to sustain their standard of living, particularly in light of the continuous changes in taxes and prices.
Seeking Professional Help Can Make a Difference
Thinking about whether you’ll have enough money for retirement can be very stressful, but it doesn’t have to be that way. There are ways to take charge of your future despite the fact that there are a lot of unknowns in today’s financial environment. To help you get through these uncertain times, collaborate with a financial expert.
Do not hesitate to contact us if you have any concerns regarding the stability of your retirement funds. In addition to shielding your principal from market swings, our staff can assist you in going over options that may yield reasonable rates of return* and protect your principal. Two product types that might give you the financial cushion you need to protect your savings in retirement are annuities and indexed universal life insurance.
*Source: Allianz