Most Americans are unsure how they will turn their retirement savings into retirement income – and concerned that they won’t have enough to last.
The new 2024 Annual Retirement Study from Allianz Life reveals that just 44% of respondents said they have a plan for taking their retirement income, although Boomers (67%) are more likely to have a plan. Worryingly, just 30% of Gen Xers, who will reach retirement age in the next decade or so, have a plan, less than the 33% of Millennials who do.
Almost half of those who took part in the research admitted that they fear having to live too frugally in retirement to be able to enjoy it.
“If you don’t know how you will draw from your retirement assets for income, then you aren’t ready to retire,” said Kelly LaVigne, VP of consumer insights, Allianz Life. “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 concerns around retirement income are exacerbated by some key issues:
Many respondents also said that they were unsure of how to best take distributions from their retirement savings for retirement income and could benefit from professional advice.
“When figuring out how to draw from your assets for retirement income, you want to include risk mitigation strategies that can help address worries about running out of money, inflation, taxes, and rising health care costs,” LaVigne said. “That strategy may include incorporating an additional source of consistent, reliable, and possibly, increasing income. A financial professional can help create a strategy for how to effectively turn your retirement assets into income that can last a lifetime.”
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