Tue, 09 April 2024 | demographics retirement
A recent study by Allianz Life Insurance Company of North America reveals a striking concern among Americans: nearly two-thirds are more worried about depleting their retirement savings than facing death. The 2024 Annual Retirement Study underscores a growing anxiety over financial security in later years, with 63% of respondents admitting their fear of running out of money surpasses their fear of death, marking an increase from 57% in 2022.
This apprehension is most prevalent among Generation X, with 71% expressing more concern over their financial future than their mortality, compared to 64% of millennials and 53% of baby boomers. The study highlights inflation, doubts about the sufficiency of Social Security, and high taxes as primary contributors to these fears, with inflation taking the lead. Forty-three percent of respondents identified recent inflation as a significant worry, a sentiment more pronounced among Black/African American (52%) and Asian/Asian American (51%) communities than among white (41%) and Hispanic (39%) respondents.
Baby boomers are notably anxious about inflation's impact on their retirement funds, more so than millennials and Gen Xers. Following inflation, 24% of participants are concerned that Social Security won't provide enough financial support, and 22% are worried about the burden of high taxes. Particularly, Gen Xers fear that insufficient retirement savings will be a significant factor in potentially running out of funds.
“Running out of money in retirement is a scary thought,” said Kelly LaVigne, VP of Consumer Insights, Allianz Life. “That’s why it is so important to have a thorough financial strategy for retirement. A financial professional can help you figure out what strategies will work for you and write it down. A written financial plan can help you ensure you are prepared with your finances so your money can last your lifetime and help ease the concerns you have that you will run out of money.”
To mitigate these concerns, Americans are considering several strategies, including increasing retirement savings (41%), curtailing current expenditures to save more (38%), and investing in financial products that guarantee lifetime income (35%). An equal percentage of respondents believe that extending their working years and postponing retirement could be a solution.
The study also revealed a strong inclination among Americans to seek advice from financial professionals on optimizing investment returns (88%), maximizing Social Security benefits (88%), and choosing financial products that assure a lifetime income (88%).
Conducted online in February and March of 2024, the survey involved a nationally representative group of 1,000 individuals aged 25 and above, with a household income of at least $50,000 (single) or $75,000 (married/partnered), or investable assets of $150,000 or more. The study aimed to capture diverse perspectives by including oversamples from Black/African American, Hispanic, and Asian/Asian American populations.