For many Americans, a healthy retirement is becoming more and more like a faraway dream. More than half of Americans do not have a plan for their retirement and would depend on Social Security to make ends meet or as their only source of income. This is true even though it is one of the things that keeps workers going.
This upsetting fact was found by the 2024 Annual Retirement Study from Allianz Life. The company asked 1,000 people over the age of 25 in February and March of this year and found that 56% of Americans do not have a solid plan for their money when they stop working.
They also found that almost half of those surveyed (48%) worry that they will live too cheaply and not enjoy retirement as much as they should.
This is a bigger worry for those who do not have enough saved to cover the difference between their expected benefit amount and their costs.
The worry about running out of money in retirement is still there: 42% said that rising costs of living were the biggest worry for retirees’ finances, and 35% said they were afraid they would outlive their retirement funds.
Along with this, 45% are worried about how to best take withdrawals from their retirement savings to make them last.
Other real worries that came up were that 32% were worried about the cost of healthcare and 30% were afraid they would spend too much in retirement and run out of money.
The report’s worrying results were explained by Kelly LaVigne, vice president of consumer insights at Allianz Life.
“If you do not know how you will draw from your retirement assets for income, then you are not ready to retire,” she said.
Building up assets is an important part of getting ready for retirement, but it is also important to know how those assets will pay for your life after you leave.
Important choices need to be made, like when to start getting Social Security and an analysis of the money you have saved for retirement.
Other retirement centric surveys
This is not the first study to find trends like these; many Americans who are getting close to retirement do not have enough money to cover their costs for the next few years and will not be able to save enough before they retire. Even worse, a lot of retirees do not have any other cash besides Social Security.
Senior wealth manager at Texas-based Aspen Wealth Management, Jim Davis, talked to Newsweek about the problem.
He said, “In previous generations, retirement was often seen as a clear, full-stop event—people worked until a certain age and then quit the workforce completely.”
Today, though, more retirees are choosing a phased method, in which they gradually cut back on their work hours instead of quitting their jobs all at once.
This change is mostly caused by the need to save money, the desire to stay mentally and socially busy for longer, and the fact that people are living longer.
Greenwald Research recently did a poll for Edelman Financial Engines and found that one in three people think they will never be able to fully retire and will have to work at least part-time into their later years. This backs up what he said.
A sad fact that the Pew Research Center added to their 2023 report was that about one in five Americans aged 65 and up were still working in 2023—that is almost twice as many as there were 35 years before.
A poll of 2,000 American retirees by the financial advice service The Motley Fool found the most important results of these studies.
When they asked, it was right after the announcement of the 2.5% cost of living adjustment for Social Security payments in 2025. Half of those people said they were thinking about going back to work because they need the money.