More than 7 in 10 Americans are expecting inflation to get worse over the next 12 months, and 3 in 4 worry that new tariffs will increase their cost-of-living expenses, according to a new study from Allianz Life Insurance Company of North America.
While the tariff question is new in response to President Donald Trump’s focus on them in the early stages of his second administration, inflation has long been a concern. The latest survey from Minneapolis-based Allianz Life, the 2025 Q1 Quarterly Market Perceptions Study, shows a significant increase with 71% expecting inflation will get worse compared to 60% saying so at the end of 2024.
Many worry about how ongoing inflation will affect their financial future—73% are concerned that the rising cost of living will affect their retirement plans. In the short term, 79% worry about rising inflation continuing to have a negative impact on the purchasing power of their income in the next six months. With that, 67% are concerned that their short-term investments (such as bonds and money market funds) do not have high enough returns to combat ongoing inflation.
“While the pain of inflation is hurting many Americans right now, the effect of inflation on your cost of living just compounds over time,” said Kelly LaVigne, VP of consumer insights, Allianz Life. “That means inflation will continue to erode your purchasing power, unless you have a long-term strategy to address it. When you retire, it is important to plan for inflation so that your standard of living does not decrease as the cost of living increases.”
Concern about a market crash has increased in the first part of the year. More than half (51%) worry that another big market crash is on the horizon, up from 46% in Q4 2024. At the same time, fewer Americans feel comfortable with investing in the market. Just 26% say they are comfortable with current market conditions and ready to invest now, down from 31% in Q4 2024.
The new study found worries about the market is leading more Americans to connect with a financial professional. Nearly 6 in 10 (59%) said they recently have or plan to reach out to their financial professional because of concerns about recent market conditions. This is up from 51% in Q4 2024.
SEE ALSO:
• Employer Trust Increases as Inflation Persists
• Americans Resolve to Focus on Finances in 2025
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
