Americans are more worried about running out of money in retirement than dying. A new study by Allianz found that 64% of Americans fear financial instability later in life more than death. The survey sampled 1,000 U.S. workers aged 25 and above.
Gen Xers, who are nearing retirement, were the most concerned. 70% said they have a greater fear of financial instability than death. 66% of Millennials shared this fear.
Even 61% of Baby Boomers, often considered more financially secure, expressed greater fear of financial ruin than death. “I wasn’t shocked,” said Mark Turner, a retired financial professional, about the study results. “I’ve literally had people call our office in tears saying, ‘I don’t care if I die tomorrow, I just need to know I’ll be okay financially.'”
The study identified several key reasons for these concerns.
High inflation was cited by 54% of respondents. High taxes and doubts about the adequacy of Social Security support in retirement were each cited by 43% of respondents. In 2015, Social Security benefits represented about 31% of the income of people over age 65.
Americans worried about retirement savings
However, the 2024 study indicated that 39% of respondents could envisage a future where Social Security no longer exists at all. Tom Buckingham, chief growth officer at Nassau Financial Group and a retirement planner, explained why Gen Xers are especially fearful.
“Gen Xers will not be able to depend on guaranteed income for life the same way most of their parents are due to concerns around Social Security and a significant shift from defined benefits plans to defined contribution plans like 401(k)s, which puts the onus on individuals to create their own spending plan,” he said. Buckingham also noted that the cost of living is much higher today than it was for previous generations, making financial preparation more challenging. “Families simply spend more today than they did decades ago, and that can be challenging when there will be fewer predictable sources of income in retirement,” he said.
Turner said that Gen X is experiencing immense financial pressure with insufficient support. “They were told to save, invest, buy a house—and now they’re sandwiched between college tuition for their kids and healthcare for their parents,” he said. “They’re close enough to retirement to feel the pressure, but still far enough that they need growth—and that’s a tough line to walk.”
However, saving for a long retirement is daunting for all ages.
Turner said people of all generations share these financial concerns. “I’ve talked to Millennials buried in student loans, Gen Xers stretched between aging parents and teenage kids, and Boomers who did everything ‘right’ but still feel behind because inflation has chewed through their savings.”
Buckingham provided some advice for mitigating these financial worries. “Most Boomers should consider annuities that provide guaranteed income for life, while Gen Xers should explore secondary sources of income during their working years,” he said.
He also emphasized that Millennials have an advantage due to the time they have to save and benefit from compound interest.
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