The majority of Americans responded that their biggest fear was not dying, but rather running out of money in retirement. This is a conclusion drawn from a recent study by Allianz Life, which found that people approaching or already in retirement are deeply concerned about economic uncertainty.
According to the survey, 64% of participants are more afraid of running out of money in retirement than they are of death. Allianz Life started polling Americans on the subject in 2022, and this pattern has persisted and gotten worse since then. According to Kelly LaVigne, VP of Consumer Insights at Allianz Life, the situation is especially pressing at present. “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’ concerns about running out of money in retirement are being fueled by a variety of economic pressures. Persistent inflation is at the top. High inflation was mentioned by more than half (54%) of respondents as a major cause of their financial strain. The cost of essentials is still rising, putting pressure on household budgets and decreasing the ability to save, even though inflation has decreased since its peak in June 2022.
Another significant worry is Social Security. Many Americans are concerned that they won’t receive enough money each month to sustain themselves in retirement. Indeed, 43% of those surveyed said they were skeptical that Social Security would give them the financial support they require. Additionally, 43% of respondents claimed that high taxes were a factor in their anxiety.
Baby boomers were the generation most vulnerable to inflation, with 61% of them citing growing costs as the cause of their anxiety. In comparison, 55% of Gen Xers and 56% of millennials agreed.
Gen Xers Are the Most Concerned About Financial Security
While worries are common among all age groups, Gen Xers, or people between the ages of 45 and 60, were found to be the most concerned about running out of money in retirement. A startling 70% of Gen Xers expressed concern about depleting their savings before they pass away. Not far behind, 61% of boomers, between the ages of 61 and 79, expressed the same fear.
Gen Xers are feeling the pinch of growing living expenses, unstable markets, and uncertainty about the sustainability of Social Security as retirement draws near. Furthermore, even though baby boomers are already in their retirement years, they, too, deal with serious financial issues that complicate long-term planning.
According to LaVigne, Social Security usually replaces 40% of the average American’s retirement income. As a result, people will probably need to depend on other sources of income in order to maintain their standard of living, particularly given the ongoing fluctuations in taxes and prices.
Seeking Professional Help Can Make a Difference
It can be extremely stressful to live with the worry that you won’t have enough money for retirement, but it doesn’t have to be. Even though there are many unknowns in today’s financial environment, there are tactics that can help you take charge of your future. It is important to ensure that you are working with a professional to help you navigate these uncertain times.
If you’re concerned about the stability of your retirement savings, reach out to us. Our staff can assist you in exploring options that offer the potential for reasonable rates of return over time while also protecting your principal from market fluctuations. Annuities and indexed universal life insurance are two examples of products that might give you the financial buffer you need to continue earning income in retirement.
To learn more about annuities, click here. For more information on indexed universal life insurance, click here.
*Source: Allianz