Americans Delay Retirement as Social Security Concerns Rise

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As millions of Americans approach retirement age, a growing number are choosing to delay their exit from the workforce, driven by financial uncertainty, inflation and widespread doubts about the future of Social Security. According to new findings from the 2025 Protected Retirement Income and Planning (PRIP) Study, the trend is especially pronounced among those between the ages of 61 and 65, who represent the largest surge of retirees in U.S. history.

The study shows that 30% of this age group are considering postponing retirement, and 28% of financial advisors say their clients have already done so. Financial concerns are the driving force: lack of pensions, insufficient savings, and a shaky outlook on Social Security are prompting older workers to rethink when — and how — they’ll retire.

“Just as businesses hesitate to make big moves in times of economic uncertainty, many working Americans are afraid of taking the leap into retirement,” said Jean Chatzky, an Education Fellow with the Alliance’s Retirement Income Institute and CEO of HerMoney. 

Confidence in Social Security is particularly low. Among consumers aged 45 to 75:

  • 58% are concerned their benefits will be reduced.
  • 14% are definitely considering claiming early.
    52% report less confidence in Social Security than they had five years ago.

This uncertainty is directly impacting financial behavior. Advisors are shifting their approach, with 65% changing their retirement planning strategies and 50% increasing client investments in annuities, making protected income the most common change in investment strategy.

For Generation X, the landscape is even more fragile. The first 401(k)-only generation is now approaching retirement age with limited pensions and growing concern. Only:

  • 14% have access to a pension
  • 41% believe their savings and income will last through retirement
  • 35% are confident they can create a retirement income plan

As Americans delay retirement and re-evaluate their plans, guaranteed income solutions like annuities are becoming more important than ever. The Coalition for Annuity Awareness remains committed to ensuring consumers and financial professionals alike understand how these tools can offer stability, protection, and peace of mind, especially when confidence in traditional safety nets continues to decline.

Read more about the study here.

Members of Congress Recognize June as National Annuity Awareness Month

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Representative Zach Nunn (R-IA) and Representative Brittany Pettersen (D-CO) have introduced a bipartisan resolution officially recognizing June as National Annuity Awareness Month in the House of Representatives. The measure highlights the vital role annuities play in helping Americans achieve retirement security and financial independence.

“Annuities offer hardworking Iowans a reliable way to protect their retirement and maintain financial independence,” said Rep. Nunn. “By recognizing June as National Annuity Awareness Month, we are helping more Americans understand their options and make informed financial decisions that support long-term stability.”

Nearly 90 million U.S. households depend on life insurance and annuity benefits. In 2023 alone, $104.1 billion in annuity payouts were made, helping families and retirees enjoy greater retirement confidence and the ability to pursue their financial goals.

“Annuities provide a unique combination of protection, growth and predictable lifetime income,” said NAFA CEO Chuck DiVencenzo. “We’re immensely grateful to Rep. Nunn (R-IA) and Rep. Pettersen (D-CO) for recognizing the importance of declaring June as National Annuity Awareness Month and co-sponsoring this resolution. We believe that passage of a resolution will be integral to helping increase education and awareness about the value annuities can play in accumulation, income and legacy planning.”

The resolution encourages more Americans to explore annuity options and seek professional financial guidance.

Read the full resolution here.

Iowa Proclamation Signing Ceremony Held

Resolving to designate June as National Annuity Awareness Month

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For nearly a decade, the Coalition for Annuity Awareness Month has been working to expand the reach of its messaging to more elected officials, industry professionals and consumers, ultimately to better our collective retirement future. One avenue for doing so has been through the pursuit of government acknowledgment of the initiative, both at the state and federal levels. Today, Sen. Moran (R-KS) sponsored the introduction of a federal resolution in the Senate designating June as National Annuity Awareness Month.

S.Res.695 designates June as National Annuity Awareness Month and calls on the United States and other public and private entities to observe the Month with appropriate programs and activities.

This marks a major win for the Coalition and its constituencies. It comes in part thanks to the efforts of many in-state sponsors who have helped us obtain 24 state proclamations, as well as proclamations in Puerto Rico and the District of Columbia, through annual direct requests. This momentum reinforces the need for consumers to have access to objective, factual data about annuities and the benefits.

Throughout the next year, we will be working to obtain a Democrat co-sponsor of the Senate resolution, and to identify a bipartisan group of Representatives to pursue a companion resolution in the House. We continue to make great strides in this critical work and would like to extend a sincere “thank you” to Sen. Moran and his team, as well as all the individuals who helped us take this big step forward in our journey.

Trade CEOs underscore the importance of annuity awareness in new video

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“It takes a village” to do many things in life, including to raise the profile of annuities in retirement planning and the value of predictable lifetime income. The Coalition for Annuity Awareness is integral to these efforts, and its leaders are proud to tell this important story.

Watch as Chuck DiVencenzo, president and CEO of NAFA; Marc Cadin, CEO of Finseca; Wayne Chopus, president and CEO of IRI; Susan Neely, president and CEO of ACLI; Kevin Mayeux, CEO of NAIFA; Jean Statler, CEO of the Alliance for Lifetime Income; and Jim Poolman, executive director of IALC kick off this year’s Annuity Awareness Month efforts!

NAFA Partners with Fellow Industry Leaders for Annuity Awareness Month

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Targeted Educational Initiatives Aim to Position Distributors and Producers to Help Increase Annuity Education Nationwide

WASHINGTON (Jun. 1, 2021) — As part of a collaborative effort to help Americans recover from the financial hardships of the ongoing pandemic and create a more secure retirement future, NAFA, the National Association for Fixed Annuities, is leading the charge in bringing National Annuity Awareness Month into the spotlight during the month of June. In addition to hosting and participating in formative educational events for both distributors and annuity professionals, NAFA is engaging with a number of organizations to distribute a toolkit of materials producers can use to help educate consumers nationwide about the features and benefits of annuity products and their role in creating predictable lifetime income.

“For more than a decade, NAFA has been working to develop the National Annuity Awareness Month initiative into a well-recognized celebration of these powerful products and the value they deliver in helping consumers close income gaps, retire with confidence and enjoy a desired lifestyle in their golden years. Through the engagement of our sister trades in the Coalition for Annuity Awareness, the breadth and depth of the initiative we’ve worked so hard to build is materializing. These industry leaders are helping expand our efforts and outreach to ensure a growing number of individuals and families have the information they need to make the best decisions for managing risk and ultimately enjoying the freedom to do more of what they love in retirement,” said Chuck DiVencenzo, president and CEO of NAFA.

NAFA is joined in the Coalition for Annuity Awareness by industry associations including the American Council of Life Insurers (ACLI), the Alliance for Lifetime Income, Finseca, the Insured Retirement Institute (IRI) and the National Association of Insurance & Financial Advisors (NAIFA), as well as a number of companies who provide support to those associations and their member companies. This year, NAFA has also recruited more than a dozen of its member companies to sponsor the National Annuity Awareness Month campaign, including Allianz, American Equity Investment Life Insurance Company, AmeriLife, Athene, Brokers International, Delaware Life, Global Atlantic Financial Group, EquiTrust Life Insurance Co., Great American Insurance Group, Lincoln Financial Group, National Western Life Insurance Company, Nasdaq, Nationwide, North American and SILAC Insurance Company.

“With more Americans turning 65 in the next three years than ever before, we’re running out of time to help them protect part of their retirement savings to cover basic expenses so they don’t go bankrupt. Now is the time to double down on education and the commitment to being part of the solution,” said Jean Statler, CEO of the Alliance for Lifetime Income. “National Annuity Awareness Month brings needed attention to these important products. We’re glad to work with NAFA and our other industry partners to shine a light on annuities as an important part of the solution to addressing the retirement income crisis facing millions of Americans.”

Throughout the past year, the coronavirus pandemic has tested our nation in many ways. In addition to the impacts on health and well-being, research from SimplyWise indicates that nearly a third of people in their 50s and one out of five in their 60s now plan to postpone retirement due to its financial effects. Moreover, continued market volatility, the demise of traditional pensions, low interest rates and rising inflation are all part of a growing challenge Americans face in preparing successfully for retirement. Despite the need for thorough preparation, data from the Employee Benefit Research Institute’s 2021 Retirement Confidence Survey indicates that 34 percent of workers have less than $50,000 saved and only half of workers report having tried to calculate how much money they will need to have saved so that they can live comfortably in retirement.

To help overcome these obstacles, the educational toolkit developed by NAFA, fellow Coalition members and sponsors includes fliers, whitepapers, social media content, a consumer-friendly presentation, digital marketing materials and a coloring book. These materials, along with an interactive quiz that individuals can take to test their annuity knowledge, are available at AnnuRetirement.com, the official home of National Annuity Awareness Month. We Love Annuities stickers are also available for purchase on the website.

“Educating consumers about the benefits of annuities is critical because an insured retirement matters,” said Wayne Chopus, president and CEO, Insured Retirement Institute. “No other financial product today offers the benefits, security and peace of mind that annuities provide. An aging population with decreasing access to pensions makes planning, self-sufficiency and annuities more critical.”

Recently, the industry has lauded efforts from Congressional leaders in both the House and the Senate for reintroducing legislation that would provide workers with greater access to annuities in retirement planning. As part of National Annuity Awareness Month outreach, NAFA has led efforts to obtain proclamations from each governor declaring Annuity Awareness Month in his or her state, bringing policymaker education to the forefront of the campaign. Early adopters in 2021 include the District of Columbia, Georgia, Illinois, Iowa, Pennsylvania and Tennessee, with an anticipation of many more proclamations to be received in the next two weeks.

“Americans are living longer in retirement than ever before and many face the very real possibility of outliving their savings. As the only financial product that guarantees lifetime income, annuities are a key tool for ensuring financial security through retirement. Helping workers access the certainty that annuities provide, especially as fewer workers have access to traditional pensions from their employers, is an important priority as policymakers continue to modernize retirement policy,” said Susan Neely, ACLI president and CEO. “During National Annuity Awareness Month, ACLI and our member companies are reinforcing our commitment to helping all consumers, regardless of where or how they work, their life stage, or the economic status of their household, access information about how annuities provide peace of mind no matter how long they live.”

“Financial security cannot be achieved without sufficient retirement savings,” said Marc Cadin, CEO of Finseca. “Annuities are a critical component in ensuring guaranteed lifetime income. Finseca is working with leaders in Congress like Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) of the House Ways and Means Committee, among others, to expand opportunity for more hardworking Americans to realize the empowerment and freedom that comes from being financially secure. Consumers who work with a financial security professional to develop a plan to meet their families’ needs can benefit from customized solutions for financial security.”

“We are working to put more Americans on the pathway to financial security by first focusing on financial empowerment, which starts with accessibility to financial education and income protection products such as annuities,” stated Kevin Mayeux, CAE, CEO of NAIFA. “Our federal work to support SECURE and SECURE 2.0, as well as our work at the state level to advocate for the adoption of the NAIC best interest annuity model, has provided the opportunity to amplify the benefits of annuities. We are proud to follow NAFA’s lead in increasing awareness of the benefits of annuities to consumers, our membership of financial advisors and policymakers.”

In addition to the content available on AnnuRetirement.com, planned events for the month include NAFA’s 11th Annuity Leadership Forum June 15-17; a Twitter chat co-hosted by NAFA and the Alliance for Lifetime Income on June 22; How FIAs Address 3 Key Risks in Retirement Planning, an educational webinar hosted by NAFA and presented by CANNEX Financial Exchanges, Ltd., on June 23; a Twitter chat hosted by ACLI on June 28; and How the Annuity Industry Is Navigating an Advisor Sea Change, a panel discussion co-hosted by NAFA and NAIFA on June 29.

Those interested in engaging with National Annuity Awareness Month efforts are encouraged to follow along on LinkedIn, Twitter, Facebook and YouTube under the @AnnuRetirement handle.

Pre-Retirement Checklist: Tips for How to Prepare for Retirement

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Pre-Retirement Checklist What is your current retirement outlook? If you’re 10 years or less from retirement, does getting everything in order seem like too much to process? Do you know where to even start?

According to a 2018 survey by the Indexed Annuity Leadership Council (IALC), 79 percent of workers surveyed admitted to expressing worry about their retirement.1

The survey also found workers who feel unprepared for retirement lack information about retirement planning, with approximately half feeling only a little or not at all informed.1

When it comes to retirement, here are some important ages to remember:

  • 50: The age when you can defer paying income tax on more of your qualified retirement plan contributions (“catch-up contributions”)2
  • 59 ½: The age when you can begin withdrawing funds from qualified plans, such as 401(k)s and IRAs, and annuity contracts without incurring a 10 percent federal penalty (unless an exception applies for early distributions)3
  • 62: Earliest age when you can start receiving Social Security retirement benefits4
  • 70 ½: The age when you must begin taking annual distributions from your qualified retirement plans, except Roth IRAs 5

Whether you’re 10, 5 or 1 year away from retirement, here are some important tips that may help put you at ease with your planning.

10 Years from Retirement

The IALC survey reported workers regretted not saving enough when it came to retirement planning. In fact, 40 percent of workers surveyed claimed their biggest mistake in retirement planning was not saving earlier.1

Have you started to think about your retirement date, and if you can afford to retire within the next decade? If you don’t think you can afford to retire in the next decade, you might need to evaluate your retirement income sources, such as your company’s 401 (k) plan, annuities, or other financial investments.

During this pre-retirement period, you should consider evaluating all your potential income sources for retirement. A retirement planning tool that can help is the Social Security Administration’s website.

The Social Security Administration allows you to set up a free account where you can receive personalized estimates of future benefits based on your earnings, get your latest Social Security statements and review your earnings history.6

Five Years from Retirement

One third of workers think they will spend more during retirement on daily expenses and activities, as compared to their current expenses, while two-thirds of workers believe they will actually spend less, according to the IALC survey.1

What kind of lifestyle do you want in your retirement, and are you financially prepared to pay for it?  According to a 2014 survey conducted by the Bureau of Labor Statistics, total yearly expenses for those surveyed averaged $49,279 for households with people age 55 and older.7

It’s important to take inventory of your assets and annual expenses so you can identify any gaps between your income and expenses.

The Bureau of Labor Statistics also stated survey participants reported housing is the greatest expense for households with a person age 55 or older.7 Think about where you want to live and what type of house, condo or apartment would be best for you in your golden years, and remember to calculate that into your expenses.

Health care is another major expense during retirement. The Lifetime Medical Spending of Retirees report stated people incur an average of $122,000 in medical expenses, including Medicaid payments, between the age of 70 and throughout their remaining years.8

Next on the list is to make sure you have a plan for health insurance, especially if you retire before age 65, which is when Medicare coverage can begin.9

Five years out from retirement is a good time to review and, if necessary, update your estate plan. Have you named the proper beneficiaries or pay-on-death designees on all of your accounts and policies?

A survey from Caring.com, a company that specializes in senior care, showed only 42 percent of U.S. adults surveyed have prepared estate planning documents, including a will or living trust. In contrast, 81 percent of adults surveyed, who were 72 or older, reported having either a will or living trust.10

Another important estate-planning document is a power of attorney (POA). A POA allows you to designate someone you trust to make important decisions for you in case you are not able to do so in the future. A financial POA allows you to designate someone to make financial decisions for you. A medical POA allows you to designate someone to make medical decisions for you.

The Caring.com survey also showed 83 percent of Americans surveyed over the age of 72 have executed a health care power of attorney.10

It’s important to make sure all necessary legal documents concerning your estate are up to date. Keep in mind, estate-planning documents are important legal documents, which should be prepared by a licensed attorney.

One year from Retirement

At one year out, retirement might seem right around the corner. You’ve spent the last decade making sure your finances and savings are in order; now it’s time to make sure you’re ready for a lifestyle change. That might even mean continuing to work in some type of professional capacity. Nearly 25 percent of Americans age 65 and older without a disability are participating in the current labor force.11

Leaving one type of profession might open the door to another in your post-retirement years. You can also make the choice to stay involved in your previous workplace, just in a different role. A retired teacher might become a substitute for the local school district, and a business executive might look into becoming a management consultant.

This is a point where you can choose how you want to earn additional income in retirement. Another important decision to make is how to spend your free time.

Social networks are often built around jobs and professions. It’s important to invest time and resources into physical and mental health and building up a new social network during retirement. This could include getting a gym membership and attending group exercise classes, joining a senior center or finding other social activities outside of work.

In preparing to retire, you have to take all of your financial, health and lifestyle decisions into account. The earlier you start making decisions about life in your golden years, the better off you may be.

While it may seem like a lot all at once, a checklist can help keep your tasks in order, especially as your retirement date gets closer. Download our pre-retirement checklistopens a pdf fileOpens a New Window. so you can start preparing for your future, whether retirement is a decade or just months away.

 

Footnotes

  1. Footnote1Indexed Annuity Leadership Council “Survey of America’s Workforce: A Study of Retirement Readiness by Industry and Occupation” 2018
  2. Footnote2 I.R.C. § 219(b)(5)(B)(i) (2018).
  3. Footnote3I.R.C §72(t)(2)(A)(i) (2015).
  4. Footnote4Social Security Administration “Benefits Planner: Retirement”
  5. Footnote5I.R.C §401(a)(9)(C)(i) (2018).
  6. Footnote6Social Security Administration “Social Security”
  7. Footnote7United States Department of Labor Bureau of Labor Statistics “A closer look at spending patterns of older Americans” 2016
  8. Footnote8National Bureau of Economic Research “The Lifetime Medical Spending of Retirees” 2018
  9. Footnote9Medicare.gov “Getting started with Medicare”↩
  10. Footnote10Caring.com “More Than Half of American Adults Don’t Have a Will, 2017 Survey Shows” 2017
  11. Footnote11United States Department of Labor Bureau of Labor Statistics “Databases, Tables and Calculators by Subject

The content is provided for informational purposes only and does not constitute advice. For specific details on how this may apply to your personal situation, contact your personal financial advisor or insurance agent for more details. American Equity contracts are only sold through independent agents. Please contact your state insurance department to see if there is an independent insurance agent in your area appointed to sell American Equity annuity contracts.
American Equity Investment Life Insurance Company® does not offer legal, investment, or tax advice. Please consult a qualified professional.