77% of Americans feel inflation threatens their retirement savings

D.A. Davidson & Co. today announced survey results revealing that more than three-quarters of Americans (77%) report that inflation is impacting, or will impact, their ability to save enough money for retirement – a significant increase from 64% surveyed in April 2022.

Increased longevity is further exacerbating retirement savings challenges, as 63% of Americans expect to live to be at least 80 years old, and 27% expect to live more than 90 years. Younger generations are increasingly expecting to live to be 100 years old (14% for Gen Z; 15% for Millennials; 12% for Gen X; 9% for Baby Boomers).

When thinking about retirement, Americans’ top concerns are outliving their money (45%), paying for the costs of health care and/or long-term care (40%) and fearing the loss of independence (26%). Perhaps because they are closer to retirement, Baby Boomers (34%) fear the loss of their independence far more than younger generations – Gen X (21%), Millennials (20%) and Gen Z (25%).

“With pensions on the wane and uncertainty around Social Security, the onus of achieving a secure retirement falls largely on the individual today,” commented Andrew Crowell, Vice Chairman of Wealth Management at D.A. Davidson. “Increased life expectancies and high inflation are certainly increasing that pressure, but working with a financial advisor can help individuals really put a plan in place to make their vision of retirement a reality.”

Consumers lack understanding of Social Security

This data reveals a pressing need for financial education on Social Security, as more than half of Americans (59%) do not accurately understand Social Security distribution strategies. Almost one-third of respondents (32%) mistakenly think there is no benefit to delaying Social Security, and more than a quarter (27%) do not know if there is a benefit to doing so. Men understand the benefits to delaying taking Social Security benefits better than women (47% vs. 35%).

Consumers also need additional education on how to factor Social Security into their retirement savings strategy. Only half of Americans (53%) expect Social Security benefits to last through their retirement. Further, three in ten Americans (31%) do not expect Social Security benefits to last through their retirement, and 16% do not expect to be able to take any Social Security benefits.

Americans are not adequately prepared to detect or prevent financial fraud

As people are living longer, they are spending more time in retirement, a stage in life when individuals are particularly vulnerable to experiencing financial fraud. One in five Americans (22%) has personally been a victim of financial fraud, and nearly one-quarter of Americans (24%) have had a loved one who has been a victim of financial fraud. Further, only one-third of Americans (33%) feel very confident in their ability to detect personal financial fraud attempts, and they are even less confident (24%) in their ability to notice when loved ones may be victims of financial fraud.

“Advancements in technology have unfortunately made financial fraud more rampant, but financial advisors can help educate individuals on red flags to watch for and put guardrails in place that can protect against fraud,” added Crowell. “Taking precautionary steps like naming a trusted advisor on your investments account can go a long way in keeping your finances secure.”

Almost one-third of Americans have not named a trusted contact on their investment accounts for their financial advisor to contact if they suspect financial fraud or deteriorating cognitive health is taking place. More men have trusted contacts identified than women (47% vs. 36%), and individuals who have previously been a victim of financial fraud are more likely to have trusted contacts identified for their investment accounts (48% vs. 40%).

Methodology

This Xcelerant Survey was conducted online by Directions Research. The survey was fielded from March 27-28, 2023, among a demographically balanced nationally representative sample of 1,038 U.S. adults 18 years of age and older.