Inflation, Recession and Healthcare Costs Continue to Keep Americans Age 50+ Up at Night When It Comes to Their Retirement, New F&G Survey Finds

DES MOINES, Iowa, July 12, 2022 – Four out of five Americans age 50+¹ (80%) say they are worried about inflation in retirement, according to a new survey from F&G, a leading provider of insurance solutions serving retail annuity and life customers and institutional clients. This feeling is even more acute among pre-retirees (84%) vs. 76% of retirees. The survey also revealed 71% of Americans are worried about a recession and 66% are worried about rising healthcare costs.

Many Americans Age 50+ Expect to Work in Retirement

The survey also found that Americans age 50+ are considering various approaches to mitigate their retirement worries likely due to the current economic climate. Sixty-two percent of retirees are changing how they budget due to inflation, and more than half (55%) of pre-retirees expect to work part-time in retirement to cover day-to-day expenses. In addition, one third (31%) of pre-retirees say it’s unrealistic for them to retire without working at least part time.

“The threat of inflation continues to be top of mind for Americans both approaching and already in retirement. In this economic environment, it’s more important than ever to revisit your retirement plan with an advisor and consider a more holistic set of products that can guarantee income, help protect against market volatility and inflation. This approach can help shift the focus to a more predictable retirement with a lifestyle of your choosing,” said Chris Blunt, CEO of F&G.

When asked about why they plan to keep working into their 70s in retirement, 40% of respondents said they need the money while 39% said they would like to have more financial options and a larger safety net. While some respondents are currently or plan to work in retirement out of financial necessity, 43% enjoy the social aspect of working.

The survey also found that the most important objective (67%) when making financial decisions on their retirement plan was steady income for the rest of their life. However, only 19% have an annuity, which can provide this type of steady income throughout retirement.

Many Pre-Retirees Have Not Planned for Unexpected Healthcare Costs in Retirement

F&G’s survey found 66% of Americans age 50+ are very or somewhat worried about healthcare/long-term care costs for themselves or their spouse/partner in retirement. Of these respondents, pre-retirees are more likely than retirees to be concerned about healthcare costs (74% vs. 58% respectively). However, nearly half (47%) of pre-retirees have not planned for unexpected healthcare costs in retirement. This can be especially concerning for those with underlying or chronic health issues.

Studies illustrate how increasing medical expenses can add up. If healthcare costs grow, for example, at 2% above consumer inflation for the next two years, a healthy 55-year-old couple could face $267,000 in additional medical costs when they retire at age 65, according to an analysis by HealthView Services.

“Unexpected expenses, especially health care costs, are clearly on Americans minds but many don’t have a plan to cover these costs in retirement,” said Blunt. “Annuities can take the pressure off your portfolio offering greater control and guaranteed income for the expected and unexpected.”

For more information on F&G’s survey, please visit fglife.com/research.

Survey Methodology

This Xcelerant Survey was conducted online by Directions Research, independently recognized as one of the nation's leading business decision insight firms. The survey was fielded from April 25 to May 6, 2022, among a demographically balanced nationally representative sample of 1,266 U.S. adults 50 years of age and older who have sole or shared financial decision-making responsibility for their household, are retired or plan to retire, and own financial products valued at $10,000 or more.

To ensure consistent and accurate representation of the U.S. general population 50 years of age and older, data are weighted to match the U.S. Census data by the following variables: sex, age, geographic region, race/ethnicity, and education. Weighting factors for each respondent are developed through a custom algorithm.

About Directions Research

Directions Research, founded in 1988, is a privately held firm based in Cincinnati, Ohio, with regional offices around the country, conducting work globally. It combines a highly experienced staff with a unique mix of innovative and proven approaches to answer pressing business issues. Directions is a member of the Insights Association and is committed to quality through the use of trusted sample partners and standard quality control processes.

Directions Research's authorization is required for any publication of the research findings or their implications. Directions Research has exercised its best efforts in the preparation of this information. In any event, Directions Research assumes no responsibility for any use which is made of this information or any decisions based upon it.

¹To qualify for the survey, respondents had to be age 50+, have sole or shared financial decision-making responsibility for their household, be retired or plan to retire, and own financial products valued at $10,000 or more.