Most Americans said they were more afraid of running out of money in retirement than they were of dying. This finding comes from a new study conducted by Allianz Life, which discovered that economic uncertainty is causing widespread anxiety among people nearing or in retirement.
According to the findings, 64% of respondents are more worried about going broke in retirement than about dying. This trend has persisted 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 especially 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 exacerbating Americans’ fears of running out of money in retirement. Persistent inflation tops the list. More than half (54%) of those polled said high inflation was a major cause of their financial stress. Although inflation has slowed since its peak in June 2022, the cost of basic necessities remains high, straining household budgets and reducing savings.
Social security is another major issue. Many Americans are concerned that their monthly benefits will not be enough to support them in retirement. In fact, 43% of respondents were skeptical that Social Security would provide the financial assistance they require. The same percentage, 43%, said that high taxes added to their anxiety.
Baby boomers were the most concerned about inflation of any generation, with 61% citing rising prices as a source of worry. In comparison, 56% of millennials and 55% of Gen Xers shared similar sentiments.
Gen Xers Are the Most Concerned
Although all age groups have concerns, Gen Xers (aged 45 to 60) are the most concerned about running out of money in retirement. A staggering 70% of Generation Xers were concerned about depleting their savings before the end of their lives. Baby Boomers, aged 61 to 79, were not far behind, with 61% expressing similar concerns.
As Generation X approaches retirement, they face rising living costs, market volatility, and concerns about the long-term viability of Social Security. And, while boomers are already retired, they, too, face significant financial challenges that complicate long-term planning.
According to LaVigne, Social Security usually replaces about 40% of the average American’s retirement income. That means people will most likely need to rely on additional income sources to maintain their standard of living, especially as prices and taxes continue to fluctuate.
Seeking Professional Help
Living with the worry 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 uncertainty, there are strategies that can help you take control of your future. Make sure you’re working with a professional who can guide you through times of uncertainty.
If you are concerned about the long-term viability of your savings, we may be able to help. Our team can assist you in researching options that protect your principal from market volatility while also providing the potential for a reasonable rate of return over time. Annuities or indexed universal life insurance may be the tools you need to generate income during retirement.
To learn more about annuities, click here. For more information on indexed universal life insurance, click here.
*Source: Allianz
