Allianz Life study finds many worry about how they will turn retirement savings into retirement income.

KEY FINDINGS:

• 44% say they currently have a plan for how they will take income in retirement
• 48% worry they will live too frugally and not enjoy retirement as much
• 45% worry about how to best take distributions from their retirement savings for retirement income

Many Americans lack a plan for how they will draw from their retirement savings for income in retirement and worry about the funds lasting for their lifetime, according to the 2024 Annual Retirement Study* from Allianz Life Insurance Company of North America (Allianz Life).

Less than half of Americans (44%) say they currently have a plan for how they will take income in retirement. Boomers (67%) are more likely than Gen Xers (30%) or millennials (33%) to say they have a retirement income plan.

“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.”

Nearly half (48%) worry about living too frugally and not enjoying retirement as much as they should.

“Without a solid strategy, the ongoing process of deciding how much money to withdraw from which account when can be daunting,” LaVigne said. “A retirement income strategy will help reduce the number of ongoing decisions you need to make. One way to help reduce the number of decisions you need to make about retirement income is to incorporate an annuity into your portfolio that offers guaranteed lifetime income.”

What are the top risks to retirement income?

Americans identified the greatest risks to their retirement income. Ranked in the top three risks to retirement income were:

• Everyday costs increasing (42%)
• Outliving money (35%)
• Healthcare costs (32%)
• Stock market dropping (31%)
• Spending too much and running out of money (30%)

Americans could benefit from the guidance of a financial professional to evaluate retirement income strategies. Many Americans (45%) worry about how to best take distributions from their retirement savings for retirement income.

“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 income1. A financial professional can help create a strategy for how to effectively turn your retirement assets into income that can last a lifetime.”

*Allianz Life conducted the 2024 Annual Retirement Study online survey in February and March 2024 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k+. The study included an oversample of respondents who identified as Black/African American (416 responses); Hispanic (398 responses); Asian/Asian American (366 responses).

1Increasing income potential is provided through annuities that offer a built-in or optional Income Benefit rider for an additional annual rider fee.

Annuities can help meet long-term retirement goals by offering tax-deferred growth potential, a death benefit during the accumulation phase, and a guaranteed stream of income at retirement.

Registered index-linked annuities (RILAs) are subject to investment risk, including possible loss of principal. Investment returns and principal value will fluctuate with market conditions so that contract value, upon distribution, may be worth more or less than the original cost.

Withdrawals will reduce contract values (including any Cash Value) and the value of any potential protection benefits. Withdrawals taken within the withdrawal charge period will be subject to a withdrawal charge or a Market Value Adjustment (MVA), depending on the product. All withdrawals are subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal additional tax.

Guarantees are backed solely by the financial strength and claims-paying ability of the issuing insurance company. RILA guarantees do not apply to the performance of the variable subaccount(s), which will fluctuate with market conditions.

Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.542.5427. www.allianzlife.com. In New York, products are issued by Allianz Life Insurance Company of New York, 1633 Broadway, 42nd Floor, New York, NY 10019-7585. www.allianzlife.com/new-york. Registered index-linked annuities are distributed by their affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. Only Allianz Life Insurance Company of New York is authorized to offer annuities in the state of New York.

About Allianz Life Insurance Company of North America

Allianz Life Insurance Company of North America, one of the Ethisphere World’s Most Ethical Companies®, has been trusted since 1896 to help millions of Americans prepare for financial uncertainties and retirement with a variety of innovative risk management solutions. In 2023, Allianz Life provided additional value to its policyholders via distributions of more than $13.73 billion. As a leading provider of fixed index annuities, registered index-linked annuities, and fixed index universal life insurance, Allianz Life is part of Allianz SE, a global leader in the financial services industry with approximately 157,000 employees in more than 70 countries. Allianz Life is a proud sponsor of Allianz Field® in St. Paul, Minnesota, home of Major League Soccer’s Minnesota United.

Annuity Alliance is not affiliated with Allianz. This article is for informational and educational purposes only. It should not be used to make a buying decision. If you would like to speak with a financial professional at Annuity Alliance using the Contact Form.