Dying or Running out of Savings: Which Scares You More?
July 13, 2010
Sure, death is scary. But even more frightening to most Baby Boomers is the prospect of running out of money.
Roughly six in 10 people said they feared outliving their income more than dying, according to a new survey by Allianz Life Insurance Co. of North America, which polled 3,200 people in May ranging in age from 44 to 75.
With the economy still stuck in low gear after the worst recession in 30 years, volatility in the stock market scaring away investors and bank rates at barely perceptible levels, perhaps the fear is not all that surprising.
Another factor that explains the dread is fear of the unknown. Almost a third of Boomers, 31 percent, said they weren't sure what their expenses might be in retirement, and 36 percent said they had no idea if their income would last.
"These results are troubling not only because people are fearful about retirement income, but also because of how little they know about how much money they'll need," Allianz Life President and CEO Gary Bhojwani said in a press statement announcing the survey results.
Baby Boomers Fail to Estimate Required Savings Rates
Survey respondents projected they'd need a median income of $59,000 per year, but they far underestimated how much they'd need to save to create that household income.
The study also asked people which they'd be more likely to guess correctly: how much money they'd have or need in retirement or how many gum balls are in a jar at the local county fair. Only a slim majority, 53 percent, felt certain about their ability to gauge retirement needs -- not many more than those who were more confident of their gum ball estimating skills.
Now that's scary.