A Majority Of Americans Worry Their Retirement Funds Will Run Out

With everything from groceries to rent to car insurance more expensive than ever, it can be easy to get wrapped up in worrying about money. This can be especially true if you're already retired or have an eye on your future retirement lifestyle. If you find that financial concerns are topping your list of anxiety-inducing worries these days, you're definitely not alone. According to Allianz Life's 2024 Annual Retirement Study, 63% reported worrying more about running out of money than they did about death.

It's also worth noting that this concern runs through all income levels, and that the amount people think they need to retire comfortably rises yearly. This can make the idea of ever reaching a specific retirement figure more complicated since the goalpost can feel like it's constantly moving. With that in mind, there are ways to help you plan for your future. Kelly LaVigne, vice president of consumer insights at Allianz Life, explained, "Running out of money in retirement is a scary thought. That's why it is so important to have a thorough financial strategy for retirement."

While you might think keeping a 401(k) or even a robust savings account is enough to financially prepare you for retirement, it could be worth looking into additional savings strategies to ensure you don't face the possibility of running out of money. Let's break down some savings strategies, and ways to navigate other retirement concerns you might have.

For starters, you might want to consider increasing your current retirement savings. Whether this means increasing your contributions or creating new and/or different retirement accounts altogether, building up your nest egg is a good place to start when it comes to saving for the future.

It's worth mentioning that 38% of respondents to Allianz's survey reported they would reduce their current spending as a strategy to save more for retirement. While that might not be possible for all families, it could be worth assessing your current budget to see if there are any places to make cuts. Or, if you don't currently have a budgetary rule, app, or system it could be worth implementing one to make sure you aren't forgetting any expenses lurking in your budget. For those who are already retired, it can be crucial not to overspend if you want to ensure you have enough money long term.

Another savings strategy to consider is setting up an income annuity. For those unfamiliar, this is where you place a set amount of your retirement savings into a product or contract that then provides lifetime income payments at a date of your choosing. In exchange for these guaranteed payments, you lose access to the principal you placed on the annuity. An important consideration with all of these strategies, however, is to discuss your options with a financial planner. While managing your own money can prove cost-effective, there's something to be said for utilizing the knowledge and expertise of professionals in the field.

While inflation is a major concern for most Americans today, it is not the singular worry on people's minds. Among the top reported concerns in Allianz's survey, 24% reported being concerned about Social Security not offering the level of financial support that it should during their retirement. With Social Security currently on track to run out of funds in 2035, it's easy to understand this particular concern. While figuring out how to fund Social Security is ultimately a legislative and political battle (which could vary depending on the country's next president), there are still some things you can do as an individual beyond voting for the policies and representatives that best reflect your economic position. Namely, ensuring you do what is required to maximize your Social Security benefits. That could include working later in life to receive the 8% benefit increase for delaying full retirement.

Another top concern was high taxes, with 22% of respondents ranking it a significant concern for their savings. It's crucial to remember that retirement accounts like 401(k)s and traditional IRAs are tax-deferred, meaning the money will be taxed as you begin to draw from the account. This can be a significant blow to your bottom line, especially if you mistakenly count their balances as your total retirement balance. You could choose instead to pursue tax diversification strategies; for example, not keeping all your retirement savings solely in a traditional 401(k) account but also in other account types like Roth IRAs or even savings/brokerages accounts.