Inflation has reached a level Americans have not experienced in decades. The rising cost of goods can chip away at retirement funds, and most people expect inflation to increase. The vast majority of people – 78% – expect inflation to get worse over the next 12 months, according to the new 2022 Retirement Risk Readiness Study from Allianz Life.

The big problem: Incomes are not rising at the same rate as inflation. Nearly 60% of people still in the workforce said their income is not keeping up with the rising cost of living. Forty percent of retirees said the same.

People who have yet to retire are particularly worried about how inflation will affect their ability to pay for necessities, save as much for retirement as they should, and attain the retirement lifestyle they envisioned.

They also may need to change course in order make ends meet. Around half of working people in the survey said they expect to find a job that pays more, reduce spending on necessities, or dip into their savings because of the increasing cost of living.

Because of the rising cost of living, have you had to, or do you expect to, do any of the following … the general numbers look like this:

- 53% “Find a job that pays more money”

- 52% “Reduce spending on necessities, like housing and food”

- 49% “Dip into my savings to make ends meet”

- 45% “Stop saving or reduce saving for retirement”

- 52% “Stop saving or reduce saving for my children’s college education”

Annuity Pros can determine if actions like stopping or reducing saving for retirement are necessary and can help clients think through the short- and long-term consequences. They can also assist in creating a strategy that factors in the risk of inflation to retirement savings.

Retirees have fewer that can help mitigate the risk inflation presents to retirement savings. 

Guidance from Annuity Pros can support retirees who are worried about inflation and help them identify steps such as using annuities to protect their retirement income and address inflation risk.

Individuals and businesses who would like to connect with Annuity Pros can get in touch instantly via our enquiry form. 

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