Retirement financial insecurity causes greater psychological distress for many individuals compared to the fear of death.
Americans' Fear of Running Out of Money in Retirement
A new study by the Allianz Center for the Future of Retirement reveals several key factors contributing to Americans' fear of running out of money in retirement.
Rising living costs and inflation are a significant concern. Increasing prices for essentials like housing, food, and transportation force many to prioritize daily expenses over saving for retirement, reducing their ability to accumulate sufficient retirement funds.
Multiple financial responsibilities, especially for Gen X, also play a role. Many are juggling child-rearing, supporting aging parents, mortgages, and other debts, which strains their ability to save adequately.
Market instability and the risk of financial crises further worry respondents. Sixty-two percent of participants fear that another financial crisis could disrupt their retirement plans, shaking their confidence in long-term financial security.
The rising rate of "gray divorce" (divorces among adults 50 and older) also disrupts retirement planning and creates more financial responsibilities and stress. More than half of survey respondents say divorce would significantly derail their retirement plans.
Fear of outliving savings is another significant concern. Sixty-four percent of Americans fear running out of money in retirement more than they fear death, highlighting a deep concern about longevity risk.
Lack of detailed financial planning also contributes to financial insecurity and stress. Many participants lack a written or long-term retirement plan, contributing to their financial worries. Having a concrete plan is seen as crucial for confidence in meeting retirement goals.
Interest in lifetime income options is growing. There is a growing interest in annuities and guaranteed lifetime income as a way to reduce uncertainty and stress about running out of money. Many are willing to pay for professional advice to manage these products to fit personal goals.
In conclusion, Americans’ fear of running out of money in retirement is driven by a combination of economic pressures (inflation, debt), life events (gray divorce), market risks, and insufficient planning, which collectively undermine their confidence in financial security during retirement. The study emphasizes that comprehensive planning and lifetime income strategies can help alleviate these fears.
References:
- The 2025 Annual Retirement Study from the Allianz Center for the Future of Retirement
- Allianz Life
- AARP
- Pew Research Center
- Gallup
The study from the Allianz Center for the Future of Retirement reveals that Americans' fear of running out of money in retirement is influenced by the rising cost of living and inflation, which forces many to prioritize daily expenses over savings, thereby reducing their ability to accumulate sufficient retirement funds. Additionally, personal-finance concerns intensify for Generation X due to multiple financial responsibilities such as child-rearing, supporting aging parents, and managing debts.
