These are the top retirement income concerns for many older Americans, according to a survey

As older Americans prepare for retirement, about four out of five said they are growing increasingly concerned about rising inflation and recession risk, according to a new survey from Alliance for Lifetime Income and CANNEX. 

Of respondents ages 45 to 75, 81% said they are worried about their reduced spending power in retirement due to rising inflation. Another 79% said they are worried about a recession driving the economy down and impacting their retirement income, according to the Protected Retirement Income and Planning Study. 

Inflation surged in June to a new 40-year high, marking the fifth time it's broken that record this year. The Consumer Price Index (CPI) increased by 9.1% annually, hitting its highest point since November 1981, according to the Bureau of Labor Statistics (BLS).

If you are struggling financially amid rising inflation, paying down debt using a personal loan can help you get a better interest rate and reduce your monthly payments. Visit Credible to find your personalized interest rate without affecting your credit score.

INFLATION HITS NEW 40-YEAR HIGH IN JUNE — WHAT THIS MEANS FOR INTEREST RATES

Americans take action as inflation rises

As anxiety over inflation grows, some Americans have started to make financial adjustments, with about 60% of respondents saying they've reduced their spending because of inflation, according to the survey.

Another report from Morning Consult also said that older generations expressed higher levels of concern over rising prices and inflation. These survey participants reported opting out of purchases and turning to cheaper substitutes. 

One major area being impacted by rising prices is travel. Through the summer season when vacations are more common, the Morning Consult study predicted that rising gas prices could cause more Americans to stay at home and avoid long trips. 

In the midst of rising inflation and recession concerns, Bank of America (BofA) recently adjusted its forecast to show a mild recession could occur this year. BofA predicted that real GDP in the fourth quarter of 2022 will decline by 1.4%, followed by a 1% increase in 2023. But on the positive side, the bank explained that this will help moderate decades-high inflation levels.

GDP decreased by 0.9% in the second quarter of 2022, marking the second consecutive quarter of decreases, the technical definition of a recession.

The Federal Reserve is also doing what it can to cool inflation. After its most recent meeting in July, the Federal Open Market Committee (FOMC) announced that it was raising the federal funds rate by 75 basis points, bringing the target range to 2.25% to 2.5%. This was the fourth rate hike so far this year. 

If you are preparing for retirement, paying down high-interst debt can be a good place to start. You could consider using a personal loan to consolidate debt and reduce your monthly payments. Visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.

ANOTHER INTEREST RATE HIKE LIKELY THIS MONTH, FED MINUTES SHOW

Financial professionals change their approach to retirement planning

The survey from Alliance for Lifetime Income and CANNEX said that many financial professionals are changing how they approach retirement planning due to the economic environment. But not all have shifted gears. 

"The chasm between consumers and financial professionals when it comes to protecting and spending money in retirement continues to confound in this latest survey," Jean Statler, Alliance for Lifetime Income CEO, said. "Against the backdrop of record inflation, a bear market and global economic uncertainty, the misalignment in what financial professionals are relying on to create retirement income, and what clients are looking for, is a problem. 

"Ninety-two percent of financial professionals are worried about inflation reducing client spending power, and so it's good that many of them have changed their retirement planning approach this past year," Statler continued. "But for those financial professionals who tell their clients to simply ride out the risks and are not considering protected income options like annuities, don't be surprised if you find them going elsewhere for advice."

About 78% of financial professionals have adjusted their guidance for retirement planning over the past year, according to the survey. This shift was largely due to inflation, which was cited by 82% of financial planners as their reason to change. Other top factors included bond returns (52%) and interest rates (48%).

"Last year's study saw nearly two-thirds of financial professionals (65%) changing their approach to retirement planning," CANNEX USA President Gary Baker said. "Fast forward to today and we see that this trend has accelerated, with a third of financial professionals more likely to recommend an annuity due to the current climate of rising interest rates, inflation and growing anxiety. 

"Our data shows that clients are searching for an alternative to traditional asset allocation strategies, and we're encouraged to see advisors responding to that demand," Baker said.

If you are preparing for retirement, you could consider using a personal loan to help pay down debt and save on your monthly payments. To see if this is the right option for you, contact Credible to speak to a personal loan expert and get all of your questions answered.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.