Nearly one-third, 32%, of Americans are “panicked” or “very worried” about inflation, Allianz Life Insurance Company of North America found in a survey. However, 64% do not have a plan to address the rising cost of living in retirement. Among the 36% who do, 51% said their plan is simply to be more frugal with money.
Fifty-four percent of Americans said they are “terrified” or “very concerned” that inflation will impede their ability to pay for health care. The same concerns were expressed about paying for long-term care (45%), living the lifestyle they would like to have in retirement (40%), being able to pay for housing (33%), paying for groceries (29%) and being able to afford to travel (27%).
Americans expect inflation to increase by an average of 4.4% a year. However, 31% thought it could increase between 5% and 10% a year, and 8% said it would be more than 10% a year. The fact is, Allianz Life says, the average inflation rate over the past 20 years in the U.S. has been 2.15%.
“Although it may be an option for managing expenses, frugality is not a financial strategy that will mindfully and effectively address the rising cost of living throughout retirement, especially one that could last 30 years or more,” says Deb Repya, Allianz Life vice president of consumer insights. “There are many factors to consider when planning a long, comfortable retirement, and addressing inflation is a critical piece of that puzzle.”
Ipsos conducted the survey for Allianz Life among 1,213 adults in July.