A recent study from Allianz Life reveals that a majority of Americans need to pay more attention to retirement savings and planning due to inflation and increasing rates, which has left little room in their wallets for other expenses. As a result, many are now more worried about running out of money during retirement than dying.
Many Americans face a “new retirement reality” that has changed their long-term outlook. According to the report, 61% of them feel this way but are not taking the necessary steps to retire comfortably. Kelly LaVigne, VP of Consumer Insights at Allianz Life, stated that this percentage has increased from 57% in 2022.
According to LaVigne, the risks to retirement plans, such as rising living costs, have become more significant lately. Additionally, the study found that 56% of Americans need help figuring out how to start planning for their retirement beyond having a 401(k) or IRA. Only 42% have a written financial plan, leaving those without one feeling anxious, which is not unexpected.
According to LaVigne, it is surprising that many people do not plan for their financial future. In fact, 40% of Americans do not have a retirement plan and believe they will just figure it out when the time comes. LaVigne emphasizes the importance of having a plan in order to achieve a successful retirement.
The Baby Boomer generation is unique in that they are the first to take responsibility for funding their own retirement. It is essential to spread the message that having a financial plan for retirement is crucial. With the increased risks associated with retirement planning in today’s economy, it is even more important to have a comprehensive plan that includes contingencies, according to LaVigne.
The concept of a “new retirement reality” is interpreted differently among generations. According to a report, 70% of Boomers think they have a better financial standing than previous generations, and 66% feel more financially equipped for retirement compared to their parents.
According to the report, a lower percentage of Gen Xers and millennials feel that their financial situation is better than that of their parents. Only 55% of Gen Xers and 61% of millennials believe they are in a better financial position overall. Moreover, the report also found that only 54% of Gen Xers and 60% of millennials feel more financially prepared for retirement than their parents.