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By Aliss Higham
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More than half of all Americans do not have a plan in place for their retirement, a new study has revealed.
Allianz Life's 2024 Annual Retirement Study has found that 56 percent of Americans have no solid financial plan for their post-working years. The survey, which polled 1,000 over 25s in February and March this year, also found that nearly half (48 percent) worry about living too frugally and not enjoying retirement as much as they should.
It also found that 45 percent are worried about how to best take distributions from their retirement savings for retirement income.
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The biggest concern to retirees' financial well-being is the ever-increasing rise in everyday costs, with 42 percent citing it as a concern, followed by 35 percent being worried about outliving their retirement funds.
Thirty-two percent said they were apprehensive about healthcare costs, while 30 percent thought they might overspend during retirement and end up running out of money.
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"If you don't know how you will draw from your retirement assets for income, then you aren't ready to retire," Kelly LaVigne, vice president of consumer insights at Allianz Life, said regarding the report.
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"So much of retirement preparation focuses on accumulating assets—and that's important—but it is critical to understand how those assets will be able to fund your life after you retire. To do that, you need to make important decisions like when to start claiming Social Security and examine what resources you have to fund your retirement."
The study follows a pattern of similar research that has found many Americans who are coming up to or are currently in retirement are struggling with the funds to see themselves through.
A recent survey for Edelman Financial Engines by Greenwald Research found that one in three respondents believe they will never be able to fully retire, and will continue to have to work at least part-time into their later years.
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"In previous generations, retirement was often seen as a distinct, full-stop event—people worked until a specific age and then exited the workforce entirely," Jim Davis, senior wealth manager at Texas-based Aspen Wealth Management, previously told Newsweek.
"Today, however, more retirees are opting for a phased approach, where they gradually reduce their work hours rather than retiring outright.
"This shift is largely driven by a combination of financial needs, increased life expectancy, and a desire to stay mentally and socially active for longer,"
A 2023 Pew Research Center report also found that around one in five Americans aged 65 and older were still employed in 2023—nearly twice as many as 35 years ago.
Following the 2.5 percent benefit Cost of Living Adjustment boost announced by the Social Security Administration earlier this month, a poll conducted among 2,000 American retirees by financial advice service The Motley Fool found that 50 percent are considering returning to work due to a lack of money.
The Motley Fool also found 28 percent of retirees rely exclusively on their Social Security benefits to see them through their retirement, while 32 percent rely heavily on its payments—totaling more than half at 60 percent.
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