Investors are so worried about their current financial situation that many have turned to desperate measures, including taking money from their 401(k) retirement savings plans, according to research recently conducted by Allianz Life.

The Minneapolis-based insurer has published two separate studies highlighting the fear and desperation investors are experiencing. In one, the “2024 Q1 Quarterly Market Perceptions Study,” 42% of more than 1,000 respondents said they are so concerned about their long-term financial stability that they have begun to dip into their retirement savings accounts.

“If you’re going to the point where you’re taking money out just to pay your bills, there’s something really wrong,” said Kelly LaVigne, vice president of consumer insights at Allianz Life. “In other words, there is some overspending done somewhere or there is something traumatic that has happened that has changed your financial position right now.”

Since some investors are resorting to their retirement accounts for extra income, it stands to reason that 67% of those surveyed said they are more worried about paying their bills than their financial future.

Inflation is the primary reason for that fear, as 69% of those surveyed said they have not been able to contribute to their savings as much because of inflation.

Breaking those numbers down by generation, millennials said they were more likely than Generation X or baby boomers to not contribute to their savings, citing inflation as the cause.

Those who contributed to the survey do not believe there is any relief in sight; 68% said they expect inflation to get worse over the next 12 months while only 37% thought it would improve.

“The problem with the current inflation is not that inflation is out of control from a percentage standpoint, but everything didn’t go back down to where it was when we first started on this wild ride,” LaVigne said.

The fear that investors are feeling right now in their finances was reflected in another Allianz survey released this month, the “2024 Annual Retirement Study.” Sixty-three percent of the roughly 1,000 participants in that survey said they were more worried about running out of money than they were about dying, which is slightly higher than the 61% who said the same thing last year and up from 57% in 2022.

Given the level of anxiety investors are experiencing, it is up to advisors to help them manage that concern, LaVigne said. One way to do that is to make sure the advisor and client have something set up to get through any potential rough times.

“Having a written plan is really the way you can help to have clients get over the anxiety plus give them some alternatives to the desperation moves that some of them make,” he said.

The fear about losing money is highest among Gen Xers; 71% of that cohort said they are more worried about losing money than dying, while only 64% of millennials said the same thing and only 53% of boomers.

It is not that surprising that members of Generation X are the ones who fear losing money the most, LaVigne said. They are right at the stage where they have young families and money is tight because they are planning for their child’s education. They have also likely not yet adjusted their home mortgage, and their time could be limited because their children are involved in numerous activities, he explained.

“[They’re] afraid that they’re going to run out of money because things are so tight from a budget standpoint,” he said. “They don’t see any end in sight, so it’s not surprising that the Gen Xers are a little bit more worried than the older individuals about this.”

The study also got into what clients wanted from their financial advisors; 88% of those worried about money who are working with an advisor want the advisor to help them maximize the returns of their investment. The same percentage wants the advisor to maximize their Social Security benefits in retirement and invest in a financial product that provides lifetime income.

“I think there’s a lot of opportunity,” LaVigne said. “I think there’s a great need for the information and the counseling that financial advisors can offer.”