Americans are increasingly worried about running out of money in retirement, even more so than the fear of death itself. A recent study by Allianz Life surveyed 1,000 U.S. adults aged 25 and older with annual incomes of $50,000 or more. The results showed that 64% of respondents across all generations are more stressed about depleting their funds in their golden years than the prospect of dying.
Kelly LaVigne, VP of consumer insights at Allianz Life, noted that this concern is much higher now than it has been for quite some time. The company has been polling people on this question since 2022. According to a study by Northwestern Mutual, Americans believe they need $1.26 million to finance a comfortable retirement.
However, this is significantly higher than the median amount of $87,000 that people have saved in their retirement accounts, as reported by the Federal Reserve Board. Among the different age groups, Gen Xers, who are nearing retirement, are the most concerned about running out of money before they die, with 70% expressing this worry.
Running out worries for retirees
Boomers, aged 61 to 79 and already in their retirement years, also share this concern, with 61% of them expressing the same fear. LaVigne pointed out that for boomers who are already retired, inflation is a significant issue because they have a fixed amount of money to last them for the rest of their lives. Although inflation rates have eased since peaking in June 2022, the cost of basic living expenses remains high, making it challenging for Americans to save extra money.
Over 50% of those surveyed by Allianz cited high inflation as a contributing factor to their fear of running out of money in retirement. Other factors include high taxes and concerns over whether monthly Social Security payments will provide sufficient financial support. On average, Social Security benefits typically replace about 40% of an American’s income, according to LaVigne.
For those feeling distressed about their retirement savings, LaVigne advises seeking professional help. He emphasizes the importance of working with a financial expert to navigate through times of uncertainty and ensure a secure financial future in retirement.
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