Many Americans have been putting retirement saving and planning on the backburner recently, partly due to inflation and increasing rates have left little in their wallets to do otherwise. In turn, a majority of them now say they are more afraid of running out of money in retirement than dying, according to a study from Allianz Life.
This “new retirement reality” has fundamentally shifted the long-term outlook for many Americans, and a whopping 61% of them share that sentiment, while not taking the necessary steps to be able to retire comfortably, the report found.
Kelly LaVigne, VP of consumer insights, Allianz Life, noted that the figure is up from 57% in 2022.
“What we have seen is that some of the longstanding risks to a retirement strategy like increasing cost of living have been magnified recently,” LaVigne said in an email. “At the same time, we found that 56% of Americans don’t know where to start planning beyond having a basic retirement account like a 401(k) or IRA. And only 42% have a written financial plan. People without a plan will be worried. That’s not surprising.”
On the other hand, LaVigne added that what is most surprising is the number of people who don’t anticipate creating a plan.
“Two in five Americans say they don’t have a financial plan for retirement and will just figure it out when they get there,” said LaVigne, adding that we’re lacking in the understanding that you need to have a plan to achieve a successful retirement.
“Boomers are really the first generation to fund their own retirements and take this on for themselves. We need to ingrain the message that you need to have a financial plan for retirement. With the magnified risks to a retirement strategy in today’s economic environment, it is more important than ever to have a thorough plan with contingencies built into it,” added LaVigne.
This “new retirement reality” is also perceived differently across generations.
For example, the report found that 70% of Boomers believe they are better off than previous generations, while 66% of them feel more financially prepared for retirement compared to their parents.
On the other hand, only 55% of Gen Xers and 61% of millennials feel they have a better overall financial situation than their parents, and only 54% of Gen Xers and 60% of millennials feel more financially prepared for retirement compared to their parents, the report found.
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