Nearly half of Americans (47%) say they are “very concerned” (36%) or “terrified” (11%) that the rising cost of living will affect their retirement plans, according to a survey from the Allianz Life Insurance Co. of North America.

Thirty-six percent of respondents say they are “very worried” or “panicked” (11%) that rising costs will prevent them from enjoying the lifestyle they want in retirement. In addition, 53% of Americans say they would feel either “very worried” (38%) or “panicked” (15%) about paying for expenses if their income was frozen and they never received an increase in annual salary. Households with lower incomes (less than $50,000 annually) are even more concerned about this.

“This study highlights the potential psychological and fiscal impact of inflation on a person’s financial strategy,” says Allianz Life vice president of Consumer Insights Katie Libbe. “As consumers move into retirement, they will not only need to consider how to make their income last for 30 years or more, but also how it can cover rising costs driven by inflation.”

Libbe notes that these inflation concerns are often overestimated, as the average inflation rate in the U.S. over the past 20 years was 2.24%. More than one-third of survey respondents, however, believe the cost of living will rise 3% to 4% during their retirement, and nearly one in 10 believe it could increase more than 10% each year.

More than one-quarter (28%) of respondents worry they won’t be able to pay for the essentials, such as housing, food and medical care, because of the rising cost of living. This number jumps to 41% for those whose household income was less than $50,000. The study revealed that the majority (57%) of respondents plan to address rising costs by living more modestly in retirement.

“Consumers can change their lifestyle and invest smartly to manage their finances during retirement. But for added security, they should also explore strategies and products that offer opportunities for their income payments to rise,” Libbe adds. “Many Americans already understand the importance of this concept, evidenced by the fact that more than half of those surveyed said they feel it is very or extremely important that guaranteed income products offer the possibility for income to increase over time.”