(401K Specialist) - Two in three Americans (67%) say they are more concerned about paying bills right now than saving for their financial future, according to the 2022 Q4 Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America.
The research, released Jan. 23, found many are turning to their retirement accounts to help account for these short-term needs. The majority of Americans (55%) say they have either stopped or reduced their retirement savings due to rising inflation. And 45% say they have had to dip into their retirement savings because of rising inflation.
“Reducing retirement savings should be a last resort, short-term answer for inflation because it could have a significant detrimental effect on financial security for years to come.”
- Kelly LaVigne - VP Consumer Insights, Allianz Life
The vast majority (82%) of Americans say they are worried about rising inflation continuing to have a negative impact on the purchasing power of their income in the next six months.
“This is why it is so important to work with a financial professional to achieve long-term financial stability with a written plan that incorporates strategies for risks like inflation.”
Millennials are the most likely to say they are forgoing long-term saving. Three in four Millennials (75%) say they are more concerned about paying bills now than about saving for their financial future, compared to 73% of Gen Xers and 56% of Boomers. At the same time, 66% of Millennials say they have either stopped or reduced their retirement savings due to rising inflation, compared to 55% of Gen Xers and 47% of Boomers.
The research also found more Americans are buckling down for the long haul in thinking market volatility will affect their future finances. If markets continue to be volatile in 2023, 65% say they will have to adjust their retirement and investment plans. This is up from 57% at this time last year. At the same time, 40% of those with a 401(k) match worry that their employer will suspend the practice.
“It’s understandable that people are worried about market risks as we start the new year, and while it might feel a little counterintuitive, it’s important to remember that money left out of the market—even in times of volatility—isn’t working hard for you,” said LaVigne. “This money, while subject to potential market drops, will also miss out on gains when the market recovers. Timing the market is always a bad idea. Missing the days when the market performs best during recovery could postpone retirement for years.”
Allianz Life conducted an online survey, the 2022 Q4 Quarterly Market Perceptions Study in December 2022 with a nationally representative sample of 1,005 Respondents age 18+.
By Brian Anderson • Editor-in-Chief
January 24, 2023
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
