Running Out of Money Worse Than Death

Death may be frightening, but to a majority of older Americans, the possibility of outliving their savings is even worse.

In a new poll of people ages 44 to 75, more than three in five (61 percent) said they fear depleting their assets more than they fear dying.

“One of the things in the study that was surprising to us was the level of fear” among respondents, says Katie Libbe, vice president of consumer marketing for Allianz Life Insurance Co. of North America, which conducted the poll of 3,257 people. “It was greater than we anticipated.”

Released in June, the poll also found that nearly all respondents (92 percent) agreed that the United States is facing a crisis in its retirement system. Among those ages 44 to 54, 56 percent are afraid they won’t be able to cover their basic living expenses in retirement. And 36 percent said they had no idea whether their nest egg was sufficient.

Yet despite their fears, a majority of respondents among all age groups (79 percent) said they believe their retirement lifestyles should surpass that of their parents.

Libbe said that Allianz recently conducted focus groups in Los Angeles, Chicago and Tampa, Fla., with older adults on retirement planning. Not surprisingly, workers who had traditional pension plans through their employers “seemed more calm and secure” about their ability to live comfortably in their later years, she said.

Those relying on personal savings or 401(k) plans to fund their retirement “were pretty nervous because they’d seen a big dent in their assets” during the economic downturn, Libbe adds.

More than half (53 percent) of poll respondents said their net worth dropped significantly during the economic downturn. Of those, virtually all said they have cut back on entertaining and dining out, 47 percent have found ways to reduce their daily living expenses and 11 percent have told their children to expect less financial support.

Carole Fleck is a senior editor at the AARP Bulletin.