Chronic inflation hinders millions of Americans’ ability to prepare for their financial future, according to a new study published by Allianz Life.
Findings from the Allianz Life Insurance Company of North America show that U.S. households are draining their retirement savings, taking on debt and reducing the amount that they are setting aside for the future to maintain their present-day finances.
Nearly 7 in 10 respondents said they have not contributed as much to their savings due to higher prices for everyday goods, while 51% of Americans said they are racking up more credit card debt in order to pay for necessities.
On top of that, nearly 42% of households reported dipping into their retirement savings because of inflation – a “worrying” sign for long-term financial stability, according to the report.
“The rising cost of living is stretching American budgets,” said Kelly LaVigne, vice president of consumer insights at Allianz Life. “Just because inflation has slowed doesn’t mean prices have gone down. In the short term, it may be wise to delay any major purchases to keep saving toward your future and avoid taking on new debt.”
The study comes as Americans continue to confront stubbornly high inflation that has rapidly eroded their purchasing power.