KEY POINTS
- A growing number of Americans are considering delaying their retirement plans and working longer than planned
- The uncertain economic landscape has many Americans reconsidering whether retirement is a realistic goal
- Average life expectancy is also increasing rapidly
A recent survey has revealed a startling reality for American workers: the prospect of retirement is more frightening than death for a significant portion of the population. According to a study conducted by LiveCareer, 61% of American workers report that they fear retirement more than death itself, while 64% consider it even more terrifying than the thought of going through a divorce .
Economic Uncertainty Fuels Retirement Fears
The survey highlights a growing concern among American workers as economic challenges continue to mount. With inflation, high-interest rates, and the rising cost of living, more Americans are rethinking their retirement plans. Over 80% of respondents admitted they have contemplated delaying their retirement due to financial worries, and a staggering 92% expressed concern that they might have to work longer than originally planned .
Jasmine Escalera, a career expert at LiveCareer, emphasised the financial anxiety many workers are experiencing: "Our survey reveals that financial stability is a primary concern among participants, with many fearing they won't be able to afford to retire and keep up with the bare essentials like health care or that they might become a financial burden to their loved ones" .
Insufficient Savings and Financial Burdens
The fear of running out of money during retirement is at the core of this growing anxiety. Many workers worry that their savings will not be sufficient to cover their needs, especially in the face of potential medical emergencies or unexpected expenses. The survey found that 39% of respondents fear becoming a financial burden to their loved ones, while another 39% are concerned that they won't have enough money saved for unforeseen costs .
Despite a rise in retirement savings, many workers still feel unprepared. According to Vanguard's data, the average balance in employer-sponsored retirement contribution plans rose to $134,128 in 2023, a 19% increase from the previous year, while the median account balance saw a 29% increase, reaching $35,286. However, these figures are far below the $1.46 million that Americans believe is necessary to retire comfortably .
Inflation and Economic Pressures
The current economic landscape has further compounded these fears. Inflation, although lower than its peak of 9.1% in June 2022, remains stubbornly high at levels above the Federal Reserve's 2% target. Compared to January 2021, prices have risen by 20%, making everyday essentials like rent, gasoline, and groceries significantly more expensive .
Low-income Americans are particularly affected, as their already limited paychecks are further strained by price increases. This economic pressure is forcing many to reconsider whether retirement is a feasible goal. A separate survey by Nationwide found that over one-quarter of non-retired investors expect to return to work after retiring due to insufficient savings, and 19% doubt they will ever save enough to retire comfortably .
Rona Guymon, senior vice president of Nationwide annuity distribution, highlighted the daunting savings goals facing Americans: "Americans believe they will need over $1 million to retire comfortably, a figure that could be discouraging for even the most committed retirement savers" .
Increasing Life Expectancy Adds to Concerns
Adding to these financial concerns is the fact that people are living longer. The average life expectancy in the U.S. has risen from 68 years in 1950 to 79 years in 2013. Today, a 65-year-old man can expect to live to age 84.3, while a 65-year-old woman can expect to live to 86.6. Moreover, babies born in 2007 have a 50% chance of living to 104 years old .
This trend is not limited to the United States. The United Nations projects that the global population of individuals aged 80 and older will triple from 137 million in 2017 to 425 million by 2050 . This extended lifespan requires more substantial retirement savings to cover the additional years, adding another layer of complexity to retirement planning.
Americans' Retirement Challenges
The results of the LiveCareer survey reveal that more than 8 in 10 respondents have seriously considered delaying their retirement plans due to financial reasons . This growing trend reflects the economic realities facing many Americans today, as they continue to battle rising costs across the board.
The survey also highlighted that 39% of respondents fear they will become a financial burden on their loved ones if they retire without adequate savings . This concern is exacerbated by the fact that many Americans feel unprepared for retirement, despite increases in their retirement account balances.
For those approaching retirement, the survey results serve as a reminder of the importance of financial planning. As the economic landscape remains uncertain, workers need to take proactive steps to ensure they are adequately prepared for retirement.
