With Social Security now a decade out from insolvency absent Congressional action, nearly three in four (74%) Americans say they can’t count on receiving Social Security benefits when planning for retirement income.
That’s according to the 2023 1Q Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America. The study, released today, surveyed more than 1,000 people over age 18 in March and found that most worry about their long-term financial stability, with 78% worrying that they might not be able to afford the lifestyle they want in retirement due to the increased cost of living.
This is up from 73% last quarter and 68% in Q1 2022. Meanwhile, 66% worry that if they don’t increase their retirement savings soon, it will be too late to have a comfortable retirement.
At the same time, 88% said it is critical to have another source of guaranteed income beyond Social Security benefits in order to have a comfortable retirement.
“Social Security benefits are often the backbone of a retirement strategy but it cannot be your entire strategy,” said Kelly LaVigne, vice president of consumer insights, Allianz Life. “A strong retirement strategy will ensure you have enough guaranteed income to cover your essential expenses. That guaranteed income can come from Social Security benefits along with other investments and protection products such as annuities.”
Americans still cautious about investing
Fewer Americans worry about a major recession right around the corner (57%) than last year. Still, 41% say they are concerned they will be laid off because of an economic downturn in 2023.
In addition, most Americans are still very cautious about investing. More than half (63%) are keeping more money out of the market than they think they should and 62% would rather have their money sit in cash than endure market swings.
“A strong retirement strategy will address potential risks like inflation and taxes,” LaVigne said. “You can’t prepare for everything, but you can prepare for anything—if you start preparing for retirement early.”
Gen X worried about long-term finances
Gen Xers, people born between 1964 and 1978, are worried about their retirement and long-term financial stability.
- 43% of Gen Xers worry their employer will suspend their 401(k) match, compared to 38% of Millennials (born between 1979 and 1996) and 24% of Boomers (born between 1945 and 1963)
- 67% of Gen Xers say they are keeping more money out of the market than they should, compared to 66% of Millennials and 54% of Boomers
- 85% of Gen Xers worry that they might not be able to afford the lifestyle they want in retirement because of the increased cost of living, compared to 80% of Millennials and 72% of Boomers
“Gen Xers are entering into and in critical years of retirement preparation,” LaVigne said. “Many people are often in their highest earning years in their 40s and 50s and finally able to really save a significant amount of money for retirement. This is when they need to establish strategies and really focus in on how they are setting themselves up for the retirement lifestyle they want.”
SEE ALSO:
• Just How Strongly Americans Oppose Social Security Cuts: AP-NORC Poll
• Social Security Trust Fund Projected to be Depleted in a Decade