More Americans see inflation as the greatest risk to retirement plans

Inflation is not just a daily concern for Americans. It is now also their main risk for retirement.

An Allianz Life Insurance Company of North America survey finds that 25% of Americans see rising inflation as the biggest risk to their retirement plans.

This is an increase from the 8% who said they saw rising prices as a risk to their pensions in 2020.

Inflation also outweighs other retirement risks that worry people in 2021, such as outlasting their money, which was cited by 8%; increased health care costs, also by 8%; and job security, 7%.

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Inflation rose 6.8% in November from a year ago, the fastest acceleration since 1982, according to Consumer Price Index data released last week.

Much of this increase in the index, which tracks the prices of consumer goods and services, is due to soaring food and energy prices.

The Allianz online survey was conducted between November 15 and 17. It included 1,115 respondents aged 18 and over.

The survey results preceded the latest data from the CPI, as well as the recent market declines caused by the announcement of the new omicron variant of Covid-19.

While all consumers see higher prices for food and heat, the problem runs deeper for people who are already retired, especially those who are older, who may be forced to choose between food. prescriptions or rent, noted Kelly LaVigne, vice president of consumer insights at Allianz Life.

Even if inflation remained stable at 3%, the cost of living would double in 24 years, he said.

“The risks in retirement are many, and this is definitely something the pandemic has brought to light,” LaVigne said.

Despite Americans’ economic concerns, Allianz’s survey found that only 12% of people include financial planning in their resolutions for 2022. That’s because most people think they already have a plan in place. or think they don’t have enough money to worry about.

Only 22% of those polled said they plan to seek professional financial advice in the New Year, up from 27% last year.

But people of all ages would likely benefit from financial counseling, LaVigne said.

“You want to make sure you have some sort of idea and professional advice on what you should be doing rather than panicking right now,” LaVigne said.

If you don’t already work with a financial advisor, interview a few and identify a professional you trust, LaVigne recommended.

By working with an advisor, you can get a feel for how you can adjust your personal plan for inflation and market risks, and in particular where you can spend less, he said.