Americans dipping into retirement savings as inflation lingers
As the Federal Reserve struggles to completely snuff out inflation, a new study from Allianz Life sheds fresh light on how higher costs are forcing shifts in American households’ financial behaviors and attitudes.
The 2024 Q1 Quarterly Market Perceptions Study, which surveyed over 1,000 individuals across the US, indicates that a large number of Americans are finding it increasingly challenging to save for the future, with a significant contingent taking on debt.
The study found that seven-tenths of participants (69 percent) have been unable to maintain their usual savings contributions as a result of inflation. This struggle is particularly real among millennials, with 74 percent reporting decreased savings, compared to 69 percent of Gen Xers and 63 percent of baby boomers.
Additionally, more than half of the respondents (51 percent) have incurred more debt as a direct consequence of inflation, a burden that millennials feel more acutely (65 percent) than older generations (49 percent of Gen X, and 31 percent of boomers). Minority groups were especially hard hit, with 61 percent of Hispanic and 58 percent of African Americans forced into taking on debt.
“The rising cost of living is stretching American budgets,” Kelly LaVigne, vice president of consumer insights at Allianz Life. “Just because inflation has slowed doesn’t mean prices have gone down.”
The pressure of immediate financial obligations compared to long-term planning is evident, with 67 percent of respondents prioritizing bill payments over their financial future. This sentiment is even stronger among specific demographics, with 76 percent of millennials and 79 percent of Hispanic respondents feeling the strain.
The research also highlights that 42 percent of
Read more on investmentnews.com
