61% of Americans say they’re more scared of running out of money than of dying — here’s 3 ways to kick your retirement anxiety to the curb

When it comes to the fears that keep Americans up at night, death may loom large — but for many, it pales in comparison to an even more terrifying threat: retirement retirement.

A “remarkable” 61% of respondents expressed fear in a recent survey conducted by life insurance giant Allianz Life (ETR:ALV). And yet, many still do not take the necessary steps to avoid such a dire fate.

Don’t forget

Why? Well, thanks to stubborn inflation, rising interest rates, market volatility and other challenges, they can barely get by in the here and now – let alone think about setting up a secure future in finances.

Almost half of respondents to the Allianz survey said they had reduced or stopped saving for retirement due to the recent financial crises and did not expect to increase their savings levels in the near future – leaving them with that their money lives in danger.

“People’s retirements are too important to leave to chance,” said Kelly LaVigne, Vice President of Consumer Insights, Allianz Life. “The key takeaway here is that the new reality of retirement requires everyone, more than ever, to have a plan and stick to it.”

If you’re afraid of getting old and poor, there are plenty of ways to build your nest egg — and stop worrying about retirement.

Retirement confidence is low

Gen Xers (ages 43-58) and millennials (ages 27-42) are more pessimistic about their financial future than boomers (ages 59-77), according to an Allianz survey.

“Understandably, Gen Xers and millennials feel uncertain about the future. And looking back on the last 10 years, who can blame them,” LaVigne said. “From financial crises to politics to pandemics , we all have reason to wonder what else may be at hand.”

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Confidence among Gen Xers, in particular, is low — because they’re zooming toward retirement and many aren’t ready. The confidence of that generation in their financial ability to support all the things they want to do in the future has dropped from 75% in 2021 to 73% in 2022 and 69% in 2023.

According to the survey, 54% of Gen Xers have no idea how much money they need to save for retirement, and 59% have no idea how long their money will last in retirement. Additionally, 64% are worried they won’t have enough saved for retirement – up from 55% in 2021.

Again, much of this concern stems from the rising cost of living, with 67% of Gen Xers reporting that their income has not kept up.

The statistics for this near-retirement generation are generally worse than those from millennials, who have plenty of time to save before retirement, and boomers, many of whom are already retired.

Regardless of age, nearly 40% of Americans say their retirement strategy has been derailed and they’re not sure when or how they’ll get it back on track. But it is not impossible. Here’s how to move from worry to action.

Make a plan

The good news, according to LaVigne, is that “even in these uncertain times, proper planning can help secure your retirement goals.”

But 40% of respondents to the Allianz survey said they don’t have a financial plan for retirement and they plan to only figure it out when they get there.

LaVigne says a good retirement plan should include “good strategies to save the money you need in retirement” as well as “risk mitigation strategies to protect you from the inevitable bad.” patches.”

There are many ways to boost your bank balance before your golden years – but some investment strategies take less time to generate returns than others.

You can seek the guidance of a financial advisor who can help you determine the best options for you in the time you have left before retirement.

Read more: 3 big mistakes people make with cash back credit cards that cost them every time they swipe

Settle your debts

Saving is important, but you’ll also want to make sure you have a plan for paying off all your debts (or at least any high-interest debts) before retirement — because you don’t want to be overwhelmed. you will be with them later in life.

This is important because things like credit card debt, your car loan, your home loan, and the remaining balance on your student loan all accrue interest over time.

You don’t want to keep racking up interest charges while trying to save – especially with rates as high as they are today.

If you are not in a position to pay the debts and you are tied to several lines of credit, you can try to negotiate with your lender or consider a debt consolidation plan, which combines your various debts into a simplified one. loan, always with a low interest rate.

Build your retirement accounts

When planning for your financial future, tax-friendly investment vehicles like a 401(k) account, are a great tool to get going.

A 401(k) retirement savings plan allows you to direct a portion of your paycheck into an account where you can invest and grow your money — and get a tax break. And some employers offer matching contribution plans, which are almost free money.

If you don’t have access to a 401(k), you may want to consider opening a traditional IRA, where you can contribute pretax income where it grows tax-free until you start to withdraw on retirement.

In 2023, you are allowed to contribute up to $22,500 to a 401(k) and up to $6,500 to an IRA.

Another option is a Roth IRA, where your contributions are taxed up front so your withdrawals are tax-free in retirement. Roth IRAs offer some advantages and flexibility compared to traditional IRAs, but they are also subject to certain rules and limitations and you may face penalties if you withdraw your earnings incorrectly. soon.

The great thing about all of these accounts is that they allow you to grow your wealth and put your money to work through investing, giving you much-needed cash flow in retirement.

Finally, heed LaVigne’s warning about the “inevitable rough patches” you’ll experience in retirement — most likely in the form of unexpected health emergencies — that can be very costly.

An employer-sponsored emergency savings account can help retirees weather health care-related financial shocks.

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This article provides information only and should not be considered advice. It is provided without warranty of any kind.