Financial shocks, caregiving, inflation and technology are top retirement concerns

December 17, 2024, Chicago, IL — The Society of Actuaries Research Institute released initial findings from its biennial Retirement Risk Survey to gain insights into financial retirement risks and help improve financial planning strategies. The survey gathered insights from U.S. retirees and pre-retirees aged 45 to 80, spanning all income levels.

According to survey responses, retirees are less likely to say that they are “better off than expected” in 2024 compared to the survey conducted in 2021. Other results reveal pre-retirees are increasingly aware of the need to financially prepare for unexpected events compared to previous surveys, yet the amount they can save decreased.

Now in its third decade, the Retirement Risk Survey is a cornerstone of the SOA’s Aging and Retirement Strategic Research Program.

Anna Rappaport, FSA, MAAA, past SOA President and current Chair of the SOA Committee on Post-Retirement Needs and Risks, said, “In response to rapid societal change and a population that is still re-adjusting after several years of the COVID pandemic, this year’s survey explored several new areas of emphasis. These include the impact of familial caregiving support on retirement planning, effects of inflation and the role of AI and other emerging technologies.”

Key findings include:

• Retirement Income: There are growing concerns about maintaining financial security in retirement. Savings and investments not keeping up with inflation is a top issue, with 78% of pre-retirees and 58% of retirees expressing concern.
• Unexpected Financial Hits: 20% of retirees and 35% of pre-retirees experienced a financial shock that resulted in a loss of more than 25% of assets. One out of five pre-retirees have run out of assets, had to downsize due to finances or were victims of fraud.
• Caregiving: 13% of male and female pre-retirees either currently provide care for or have provided care to others who are not their own minor children (e.g., parents, adult offspring, grandchildren, extended family). Meanwhile, 6% of male retirees and 9% of female retirees have done or are currently doing the same. When asked about the top impact of caregiving responsibilities, male and female pre-retirees (36% and 26% respectively) and female retirees (35%) cited emotional and/or physical toll, while male retirees (14%) cited long-term care planning.
• Family: Less than 10% of retirees and pre-retirees surveyed provide significant financial support to family members or anticipate receiving financial support from family. Also, 38% of pre-retirees feel unprepared to take on a family member’s medical emergency or health issue, while 27% of retirees expressed the same.

“I’m concerned respondents might be overestimating their level of preparedness,” said Rappaport. “The costs and caregiving obligations connected to a medical emergency or health issue can be very high. Even though inflation rates have come down, many are still affected by high prices for housing and groceries.”

• Inflation: Rising costs are impacting respondents’ food and daily expenses (51% of pre-retirees and 35% of retirees), utilities (45% of pre-retirees and 29% of retirees), and lifestyle (44% of pre-retirees and 27% of retirees). This has led more pre-retirees to adjust savings strategies, particularly for individuals with annual income of less than $100,000.
• Technology: Online banking is the most frequently used technological tool, with 62% of all respondents citing “often use” for retirement planning management. When asked about factors inhibiting use of new automated tools for retirement planning, many cited a lack of trust in security and technology, which could be contributing to growing concern of fraud or scams.

The full Retirement Risk Survey report will publish in early 2025. For more information on the SOA’s Aging and Retirement Strategic Research Program, visit soa.org/programs/aging-retirement.

Survey Methodology

When interpreting the findings, it’s essential to consider the limitations of the applied methodologies. Conducted online, survey responses (2,012 total respondents) were weighted by age, education, gender, income, and race/ethnicity to align with targets from the March 2024 Current Population Survey (CPS), following a methodology used since the 2015 survey. This year, a race/ethnicity demographic cut was introduced to enable more granular comparisons. Positive weighting factors indicate that the SOA survey data under-sampled compared to CPS data. The final weighted dataset was categorized into six demographic groups, creating 2,240 unique demographic segments. However, some segments were not represented, resulting in underrepresentation despite the weighting adjustments.