2 in 3 Americans Fear Going Broke Over Dying: In 2025, a striking survey by Allianz Life revealed that nearly 2 in 3 Americans—64%—fear going broke more than dying. This unsettling statistic underscores a growing crisis in retirement preparedness. With the rising cost of living, market unpredictability, and dwindling trust in Social Security, many Americans are unprepared for a financially stable retirement.
The idea of outliving one’s savings is no longer a distant worry—it’s a pressing concern for millions. Fortunately, you can avoid some of the biggest pitfalls that leave retirees vulnerable. In this article, we’ll cover three major retirement mistakes, backed by data, practical advice, and expert insight, to help you build a more secure and sustainable future.
2 in 3 Americans Fear Going Broke Over Dying
The fear of running out of money in retirement is real—and justified. With 64% of Americans more afraid of going broke than dying, it’s never been more important to plan smartly and avoid the biggest retirement mistakes. Start with a comprehensive retirement plan, delay Social Security if possible, and stay calm during market swings. Whether you’re 25 or 55, there’s still time to course-correct and build a financially secure future.
| Insight / Statistic | Details |
|---|---|
| 64% | Americans fear outliving their money more than dying |
| $1.26 million | Average amount Americans believe they need to retire comfortably |
| $87,000 | Median retirement savings among all adults, according to Northwestern Mutual |
| Biggest Concerns | Inflation, health costs, Social Security solvency |
| 3 Major Mistakes | No plan, early Social Security claims, panic investing |
| Best Practice | Begin saving in your 20s-30s and adjust with age and risk tolerance |
| Official Resource | Social Security Administration |
1. Not Having a Comprehensive Retirement Plan
Many Americans delay retirement planning or avoid it altogether. According to Fidelity Investments, only 38% of workers have calculated how much they need to retire. Without a clear and realistic plan, it’s nearly impossible to achieve financial stability in retirement.
What Should Be in a Retirement Plan?
- Expense Forecasting: Calculate expected expenses including housing, food, insurance, travel, and healthcare.
- Income Mapping: Estimate sources like Social Security, 401(k)/IRA withdrawals, pensions, and annuities.
- Inflation Adjustment: Factor in a 2–3% annual inflation rate to keep projections realistic.
- Long-Term Care: Include insurance or funding for nursing or assisted living costs.
- Withdrawal Strategy: Implement a “safe withdrawal rate,” typically 4%, to stretch savings over decades.
Real-Life Example
Linda, a 62-year-old teacher from Ohio, retired without estimating her healthcare costs. Within three years, high out-of-pocket medical bills forced her to return to part-time work. A robust plan with contingency savings could have prevented this.
2. Claiming Social Security Too Early
Many retirees claim Social Security at age 62, the earliest possible age. While that provides quick cash, it comes with a cost. Your benefits will be permanently reduced compared to waiting until full retirement age (66-67) or even 70.
Here’s How Benefits Differ:
- Age 62: ~70-75% of full benefits
- Full Retirement Age (FRA): 100% of benefits
- Age 70: Up to 132% of FRA benefits due to delayed retirement credits
Why Wait?
If you’re in good health, have other income sources, or plan to work longer, delaying Social Security can result in significantly higher lifetime benefits. According to the Social Security Administration, for every year you delay past FRA, your benefit increases by about 8%.
Smart Strategy
Work with a certified financial planner to run a break-even analysis. This can show the optimal age for claiming benefits based on life expectancy and financial needs.
3. Reacting Emotionally to Market Volatility
Fear is a powerful motivator, but in investing, it can be your worst enemy. During market downturns, many investors panic and sell off assets—locking in losses and missing the rebound.
Common Emotional Mistakes:
- Panic Selling: Selling at the bottom during market crashes
- Overcorrection: Moving all investments to low-risk assets like bonds
- Ignoring Rebalancing: Letting market gains or losses throw off your target asset allocation
What Experts Recommend:
- Diversify: Spread investments across asset classes (stocks, bonds, real estate).
- Stick to Your Plan: Don’t change strategy based on news headlines.
- Rebalance Regularly: Adjust your portfolio annually or after major life changes.
Example Scenario
During the 2020 COVID crash, the S&P 500 fell over 30% in a month—but recovered fully within five months. Investors who stayed the course recovered. Those who sold missed a once-in-a-decade rebound.
Bonus: Additional Retirement Planning Tips As 2 in 3 Americans Fear Going Broke Over Dying
Start Early
Even small contributions in your 20s and 30s can grow substantially thanks to compound interest. A $200 monthly investment earning 7% annually will grow to over $500,000 in 35 years.
Catch-Up Contributions
If you’re 50 or older, you can contribute an additional $7,500 to your 401(k) and $1,000 to your IRA in 2025. Use this to accelerate savings before retirement.
Health Savings Account (HSA)
Use an HSA to pay for qualified medical expenses tax-free. Funds roll over and can be invested, making this a powerful retirement healthcare tool.
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Frequently Asked Questions (FAQs)
Q1: How much money do I need to retire?
That depends on your lifestyle, but many experts suggest 10–12 times your annual income.
Q2: Is Social Security enough to live on?
For most retirees, no. The average monthly benefit in 2025 is about $1,907. It’s designed to replace only 30–40% of your pre-retirement income.
Q3: What’s a good age to retire?
This depends on your savings, health, and goals. While 65 is common, some work into their 70s for benefits and healthcare coverage.
Q4: Should I hire a retirement planner?
Yes—especially if you’re within 10 years of retirement. A certified financial planner (CFP) can help develop a tax-efficient and sustainable withdrawal strategy.
