Some Americans are terrified that inflation will wreck their retirement dreams, according to a recent study by Allianz Life Insurance Company of North America.
Eleven percent of the 1,005 people surveyed say they are “terrified” the rising cost of living will hurt their retirement plans, and another 36% are “very concerned,” says Allianz. In addition, 11% of respondents say they are “panicked,” and 36% say they are “very worried” they won’t be able to sustain the lifestyle they want in retirement because of inflation.
In that vein, respondents say they would be panicked (15%) or very worried (38%) about meeting their expenses if they never received another raise.
“This study highlights the potential psychological and fiscal impact of inflation on a person’s financial strategy,” says Katie Libbe, Allianz Life vice president of consumer insights. “As consumers move into retirement, they will not only need to consider how to make their income last for 30 years or more, but also how it can cover rising costs driven by inflation.”
However, many Americans also overestimate the rate of inflation, which has averaged 2.24% over the last 20 years. In aggregate, more than 60% of respondents pegged future inflation rates being anywhere from 3% to 10% annually. The study revealed 57% plan to address rising costs by living more modestly in retirement.