U.S. Heading From Retirement 'Crisis' to Retirement 'Catastrophe': Allianz

What You Need to Know

A majority of Americans now consider accounting for financial crises as a permanent part of retirement planning, a new survey shows.
Nearly 40% say their retirement strategy has been derailed by recent economic events.
Baby boomers believe they are better prepared for retirement than their elders, but Gen Xers and millennials are more pessimistic.

Unless a major course correction is achieved, workers in the United States appear to be on track for significant retirement hardship, and a growing body of academic and survey research suggests Americans are facing a grim new reality after they retire.

The latest analysis pointing to this conclusion was published Wednesday by Allianz Life.

According to the firm’s new poll of some 1,000 middle-class American households with incomes above $75,000 ($50,000 for singles) or investable assets of $150,000 or more, market volatility and recurring financial crises are making planning for retirement extremely challenging.

In a summary of the survey results, Kelly LaVigne, vice president of consumer insights for Allianz Life, suggests the nation may be facing more of a retirement “catastrophe” than a retirement “challenge” or “crisis.”

“Understandably, Gen Xers and millennials are feeling uncertain about the future. And looking back over the past 10-plus years, who can blame them?” LaVigne says. “From financial crises to politics to the pandemic, we all have reason to wonder what else might be just around the corner.”

The good news, LaVigne says, is that Americans can take action today to better prepare themselves for retirement. Even in uncertain times, she says, proper planning will go a long way toward securing retirement goals.

“That’s why it’s so important to have a written financial plan that includes not only sound strategies to accumulate the money you’ll need in retirement, but that also includes risk mitigation strategies to protect you from the inevitable rough patches,” she says. “The key takeaway here is that the new retirement reality requires everyone, now more than ever, to have a plan and stick to it.”

Crisis Mode

The new data suggest the dynamics of retirement planning have dramatically shifted as Americans navigate inflation, market volatility, financial crises, fear of bank failures and other challenges.

With so many financial risks, many Americans may be trading a more secure financial future just to get by in the here and now, Allianz Life says.

For example, recent financial crises caused 46% of respondents to say that they have reduced or stopped saving for retirement without plans to increase their savings levels in the foreseeable future to account for the disruption.

At the same time, 49% say that everyday costs are increasing so much that they won’t be able to afford basic expenses in the future, and this is seen as one of the greatest risks to retirement success. This percentage is up from 44% in 2022 and 38% in 2021, according to Allianz Life.