Saving for retirement is challenging, and a recent poll shows that skyrocketing inflation is making it much more difficult. According to a poll of 1,004 people conducted by insurance company Allianz Life, more than half of Americans (54%) have reduced or ceased saving for retirement. The bleak reality is a direct outcome of the greatest inflation levels in four decades. Millennials (65%) were more likely than baby boomers (40%) and Gen Xers (59%) to have ceased saving or cut their contributions for retirement owing to inflation. Intriguingly, other data reveals that Gen X, in particular, prioritizes retirement savings over other expenses such as vacations. According to the Allianz Life survey, 80% of respondents are concerned about increasing inflation and its impact on their purchasing power in the next six months, and 75% are concerned it may harm their retirement plans. Saving for retirement in the face of rising inflation The notion that Americans struggle to save for retirement is not new. According to the most recent Northwestern Mutual data, Americans believe they would require a whopping $1.25 million to retire comfortably. Most folks are nowhere near that figure. During the pandemic, America’s savings rate skyrocketed, thanks in part to stimulus payments and the fact that travel, restaurants, and other usual spending were mainly off-bounds. However, the savings boom seems to be over. According to Northwestern Mutual data, the average retirement savings in America increased from $87,500 in 2020 to $98,800 in 2021 before falling 11% to $86,869 in 2022 due to rising inflation and economic turbulence. People are understandably concerned about how inflation may affect them in the future. Individuals in their 40s and 50s are the most concerned. 80% of Gen Xers are concerned about how inflation will influence their retirement plans, compared to 72% of boomers and 76% of millennials.
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My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial [email protected] 914-302-2300
