The majority of Americans interviewed said their biggest fear was not death, but running out of money in retirement. This is the conclusion of a recent study by Allianz Life, which discovered 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 began polling Americans on the subject in 2022, and this pattern has persisted and worsened 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
A number of economic factors are contributing to Americans’ concerns about running out of money in retirement. Persistent inflation is at its peak. More than half of the respondents (54%) identified 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 the ability to save.
Another major concern is Social Security. Many Americans are concerned that they will not receive enough money per month to support themselves in retirement. Indeed, 43% of those polled were skeptical that Social Security would provide the financial assistance they require. In addition, 43% of respondents said high taxes contributed to their anxiety.
Baby boomers were the generation most vulnerable to inflation, with 61% citing rising costs as the source of their concern. In comparison, 55% of Generation X 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 those aged 45 to 60, were found to be the most concerned about running out of money in retirement. A startling 70% of Gen Xers are concerned about depleting their savings before they die. Not far behind, 61% of boomers (aged 61 to 79) expressed the same fear.
As retirement approaches, Gen Xers are feeling the pressure of rising living costs, volatile markets, and uncertainty about the long-term viability of Social Security. Furthermore, even though baby boomers are now in their retirement years, they, too, face serious financial challenges that complicate long-term plans.
According to LaVigne, Social Security typically covers 40% of the average American’s retirement income. As a result, people will likely have to rely on other sources of income to maintain their standard of living, especially given the ongoing fluctuations in taxes and prices.
Seeking Professional Help Can Make a Difference
It can be extremely stressful thinking about whether or not you’ll have enough money for retirement, but it doesn’t have to be that way. Even though there are many unknowns in today’s financial landscape, there are strategies that can help you take control of your future. Work together with a financial professional to help you navigate these uncertain times.
If you are concerned about the stability of your retirement savings, please don’t hesitate to contact us. Our staff can help you explore options that have 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 types of products that may provide you with the financial cushion 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