Most Americans said they were more afraid of running out of money in retirement than of dying. This is an eye-opening finding from a new study conducted by Allianz Life, which discovered that economic uncertainty is causing widespread concern among people approaching or in retirement.
According to the study, 64% of respondents are more concerned about going broke in retirement than dying. This is a trend that has continued since 2022, when Allianz Life began surveying Americans on the subject. 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.
What Fuels Financial Anxiety?
A variety of economic pressures are fueling Americans\’ concerns about running out of money in retirement. Persistent inflation ranks first on the list. More than half (54%) of those polled said high inflation was a major contributor to their financial stress. Although inflation has slowed since its peak in June 2022, the cost of basic necessities continues to rise, straining household budgets and reducing savings.
Social Security is another major concern. Many Americans are concerned that their monthly benefits will not be sufficient to support them throughout retirement. In fact, 43% of respondents expressed doubts that Social Security will provide the financial support they require. The same percentage, 43%, stated that high taxes contributed to their anxiety.
Baby boomers were the most concerned about inflation of any generation, with 61% citing rising prices as the source of their anxiety. In comparison, 56% of millennials and 55% of Gen Xers expressed similar sentiments.
Gen Xers Are the Most Concerned
Although all age groups have concerns, Gen Xers—those aged 45 to 60—have emerged as the most concerned about running out of money in retirement. A staggering 70% of Gen Xers expressed concern about depleting their savings before the end of their life. Baby Boomers, aged 61 to 79, were not far behind, with 61% expressing the same fear.
As Gen X approaches retirement, they are confronted with rising living costs, market volatility, and concerns about the long-term viability of Social Security. And, while boomers are already in retirement, they, too, face significant financial challenges that make long-term planning more difficult.
According to LaVigne, Social Security typically replaces roughly 40% of the average American\’s retirement income. That means people will most likely need to rely on additional income streams to keep their standard of living stable, especially as prices and taxes continue to fluctuate.
Seeking Professional Help
Living with the fear of running out of money in retirement can be stressful—but it doesn\’t have to be. While today\’s financial landscape is fraught with uncertainties, there are strategies available to help you take control of your future. Make sure you\’re working with a professional who can help you get through times of uncertainty.
If you\’re concerned about the long-term viability of your savings, we can help. Our team can help you explore options that protect your principal from market volatility while also offering the potential for reasonable rates of return over time. Annuities or indexed universal life insurance may be the tools you need to generate income in retirement.
To learn more about annuities, click here. For more information on indexed universal life insurance, click here.
*Source: Allianz