For many Americans, a healthy retirement is becoming increasingly unattainable. Even though it is one of the things that keeps workers going, more than half of all Americans today do not have a retirement plan in place and rely on Social Security to make ends meet or as their sole source of income.
This disturbing fact was discovered in Allianz Life’s 2024 Annual Retirement Study. In February and March of this year, the company polled 1,000 Americans over the age of 25 and discovered that 56% of them do not have a solid financial plan for their post-working years.
Another thing they discovered is that nearly half (48 percent) are concerned about living too frugally and not enjoying retirement as much as they should, which is especially concerning for those who do not have enough savings to cover the difference between their potential benefit amount and expenses.
And that concern isn’t going away; 42 percent said the biggest concern for retirees’ financial well-being is the rising cost of living, while 35 percent were concerned about outliving their retirement funds. This was followed by 45 percent of respondents who are concerned about how to best take distributions from their retirement savings for retirement income in order to make them last.
Other valid concerns raised included 32% being concerned about healthcare costs, and 30% believing they would overspend during retirement and run out of money.
Kelly LaVigne, vice president of consumer insights at Allianz Life, explained the report’s troubling findings in a statement: “If you don’t know how you’ll draw on your retirement assets for income, you’re not ready to retire.”
Much of retirement planning is focused on asset accumulation, which is important, but it is also critical to understand how those assets will be used to fund your life after retirement. To do so, you must make critical decisions such as when to begin claiming Social Security and what resources you have available to fund your retirement.”
Other retirement centric surveys
This is not the first study to discover similar trends; many Americans approaching retirement do not have enough funds to cover their expenses for the foreseeable future and will be unable to save enough before taking the plunge. Worse, many retirees lack sources of income other than Social Security.
Jim Davis, senior wealth manager at Texas-based Aspen Wealth Management, told Newsweek that “in previous generations, retirement was often seen as a distinct, full-stop event—people worked until a certain age and then exited the workforce entirely.
Today, however, more retirees are choosing a phased approach, in which they gradually reduce their work hours rather than retiring immediately. This shift is largely driven by a combination of financial needs, increased life expectancy, and a desire to remain mentally and socially active for an extended period.”
His statement was supported by a recent Greenwald Research survey for Edelman Financial Engines, which found that one-third of respondents believe they will never be able to fully retire and will have to work at least part-time in their later years.
The Pew Research Center also included a sad fact in their 2023 report: approximately one in every five Americans aged 65 and older were still employed in 2023—nearly twice as many as 35 years ago.
The Motley Fool, a financial advice service, conducted a poll of 2,000 American retirees, which was the highlight of this series of surveys.
They asked the question shortly after the announcement of the 2025 2.5 percent cost of living adjustment for Social Security benefits, and they discovered that 50 percent are considering returning to work due to a lack of funds.
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