The majority of Americans surveyed said their biggest fear was not death, but running out of money in retirement. This is the conclusion of a recent Allianz Life study, which discovered that people approaching or currently in retirement are deeply concerned about economic uncertainty.
According to the survey, 64% of respondents are more concerned about running out of money in retirement than about dying. Allianz Life began polling Americans on the subject in 2022, and the trend has continued and worsened since then. According to Kelly LaVigne, VP of Consumer Insights at Allianz Life, the situation is particularly pressing right now. “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
A variety of economic factors contribute to Americans’ fears about running out of money in retirement. Persistent inflation has reached its peak. More than half of the respondents (54%) cited high inflation as a major source of financial stress. Despite the fact that inflation has decreased since its peak in June 2022, the cost of essentials continues to rise, putting pressure on household budgets and reducing savings.
Another major concern is social security. Many Americans are concerned that they will not have enough money each month to support themselves in retirement. Indeed, 43% of those polled were skeptical of Social Security’s ability to provide the necessary financial assistance. Furthermore, 43% of respondents said high taxes made them anxious.
The baby boomer generation was the most vulnerable to inflation, with 61% citing rising costs as a source of concern. In contrast, 55% of Generation X and 56% of millennials concurred.
Gen Xers Are the Most Concerned About Financial Security
While concerns are shared by all age groups, Gen Xers, or those aged 45 to 60, were found to be the most concerned about running out of money in retirement. A startling 70% of Generation Xers are worried about depleting their savings before they die. Not far behind, 61% of boomers (aged 61 to 79) shared the same fear.
As retirement approaches, Gen Xers are under pressure from rising living costs, volatile markets, and concerns about the long-term viability of Social Security. Furthermore, while baby boomers are now in their retirement years, they, too, face significant financial challenges that complicate long-term plans.
According to LaVigne, Social Security typically accounts for 40% of the average American’s retirement income. As a result, people will most likely have to rely on alternative sources of income 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 worry about whether or not you will have enough money for retirement, but it does not have to be that way. Despite the many unknowns in today’s financial landscape, some strategies can help you take control of your future. Collaborate with a financial expert to help you navigate these uncertain times.
If you have any concerns about the stability of your retirement savings, please do not hesitate to contact us. Our staff can assist you in exploring options with the potential for reasonable returns over time, while also protecting your principal from market fluctuations. Annuities and indexed universal life insurance are two types of products that may provide you with the financial security you require to enjoy your retirement confidently.
*Source: Allianz