Are You Better Off Dead Than Broke? Americans Think So.

Longer ago than we'd like to think, Jerry Seinfeld quipped about death:

"I saw a thing, actually a study, that said speaking in front of a crowd is considered the No. 1 fear of the average person. I found that amazing. No. 2 was death. Death is No. 2? This means, to the average person, if you have to be at a funeral, you would rather be in the casket than doing the eulogy."

That joke killed in the late 1990s. But if he revived it today, you'd be excused for telling Jerry to get himself some real problems.

Like being broke.

The Tea

Don't get us wrong: Glossophobia (the fear of public speaking) is still going strong. But among things Americans fear more than death, you can add "being on the street" to "being behind a lectern."

According to the 2025 Annual Retirement Study from the Allianz Center for the Future of Retirement, nearly 2 in 3 Americans (64%) worry more about running out of money than death.

To be a little more specific, they're worried about running out of money in retirement, which makes the age breakdown of responses so interesting. By generation:

• Gen X: 70%
• Millennials: 66%
• Baby Boomers: 61%

It seems odd at a glance, but that largely tracks with the data we've seen in a host of similar surveys on retirement anxiety. Specifically, Baby Boomers—who are largely already in retirement and now (hopefully) understand how their post-career finances work—have less fear about many retirement-related financial issues than Gen X and Millennials, who don't yet know what retirement will bring. 

Young and the Invested Tip: There's plenty you can do to avoid running out of money in retirement … but there's also plenty of things you shouldn't do.

In short: you don't know what you don't know…until you know.

And for what it's worth, the survey might be underestimating Americans' fear on this front. That's because the survey sampled respondents with an annual household income of more than $50,000 (single) or $75,000 (married/partnered), or who had investable assets of $150,000. In other words, Americans closer to or below the U.S. poverty line ($15,650 single, $32,150 family of four)—who might understandably have high levels of fear of running out of money—aren't represented.

So, what's fueling this fear?

The Take

The factors cited as causing these fears should sound awfully familiar, as they're economic pressures that just about all of us face, even if we're not remotely thinking about retirement.

Young and the Invested Tip: You might not be thinking about retirement … but maybe you should be. Everyone should ask themselves these 10 retirement questions.

Let's look at the primary culprits … and talk about what you can do to address each of these concerns.

High inflation (54%)

Every last person reading this has felt the pain of rising consumer prices. The global COVID economic recovery, Russia's war with Ukraine, and supply-chain chaos caused the prices of just about everything to spike for a couple of years—and while the rate of inflation has moderated, we're stuck with those high prices.

How to fight this fear: To start, you'd be ahead of many people by simply including inflation at all in your retirement plans.

It's common to see DIY retirement budgets list an expenditure line for the first year … that stays exactly the same for Year 2, Year 3, and so on. That's simply not realistic. Food, fuel, utilities, rent (if you don't own), and other costs are extremely likely to rise every year in your retirement.

However, even if you account for regularly rising prices in your budget, you likely wouldn't bank on a level of inflation like what we experienced in 2021-22. Because historically speaking, that was a massive outlier.

But even if you don't expect sky-high inflation, you can still prepare for it by …

• Choosing a retirement withdrawal strategy that uses inflation as a factor in calculating how much you'll take out in a given year to maintain your lifestyle.
• Running simulations on your retirement withdrawal strategy to determine whether it will hold up if we experience a similar spike sometime in the future.

Both of these tasks are fairly difficult on their own—retirement planners serious about ensuring they're ready to combat inflation could do well to consult with a financial advisor.

Social Security not providing as much financial support as necessary (43%)

This fear isn't completely unfounded, but it's driven by a few misconceptions.

Most notably, many Americans worry that Social Security will completely vanish at some point in the near future. That's a myth. Barring some unforeseen legislation, Social Security should be able to pay some level of benefits well into the foreseeable futures.

But Social Security might not pay out what it used to. As things stand today, Social Security's reserves are projected to be depleted by 2035. At that point, benefits from Social Security's trust funds would be paid out of annual tax revenue at a reduced rate—expected to be 80% at first, then slowly declining over time.

On that front, all we can do is suggest you call your elected representatives.

Young and the Invested Tip: *When* you take Social Security can have a material impact on the size of your retirement benefits.

However, another misconception some Americans have is that Social Security is meant to replace your working-age income. It's not. The Social Security Administration comes out and says it out front in its Social Security basics guide: "Social Security was never meant to be the only source of income for people when they retire."

Social Security benefits started at "full retirement age" might replace as much as 78% for very low earners, but the median earner will receive closer to 42%, and maximum earners will see as little as 28%.

In other words, some people might have too-high expectations of what Social Security is meant to provide. Virtually all Americans will have to rely on some level of savings to retire. And your retirement plan should account for that. A good place to start is by finding out how much Social Security you should expect to receive, which will help you determine how much in personal savings you'll need.

High taxes (43%)

We have great news about this fear—most Americans will have a lower tax rate in retirement than they had during their working years.

Of course, we said most. Not all.

For instance, if you've been a diligent saver and built up a considerable nest egg, the amount you end up withdrawing to cover expenses in retirement could actually put you into a higher tax bracket. And even if you elect to take less early in your retirement to dodge a bigger tax bill, you eventually might have no say in the matter if your plan has required minimum distributions (RMDs) and those RMDs are sizable.

Still, there's plenty you can do to reduce your tax bill in retirement, even if you're going to fall into a smaller bracket later in life.

One of the easiest things you can do is put some of your savings away in a Roth IRA. These and other Roth accounts allow you to contribute money that has already been taxed. After that, your money grows tax-free within the account, and you generally don't have to pay taxes or penalties on any withdrawals once you reach age 59½. 

What if you're near retirement and have already saved in non-Roth accounts, or what if you earn too much and aren't allowed to contribute to a Roth? Well, you could look into a Roth conversion or backdoor Roth conversion, respectively, in which you take an upfront tax hit in exchange for avoiding taxes farther down the road.

And in general, a good financial advisor should be able to provide you with a number of other action items to help you lower your post-career tax obligations.

Thank you for reading, and if you're a football junkie, enjoy the last few rounds of the NFL Draft today!

Riley & Kyle