The 5 biggest financial concerns for retirees, according to new research
Retirees are facing new financial anxieties as inflation, rising health care costs, and fears of outliving savings are on the rise, according to recent research. A survey conducted by investment firm Schroders found that one in five retirees are struggling financially, with the rising cost of living being their top concern. Approximately 90% of retirees expressed worries that inflation would erode the value of their assets.
This concern is reflective of a broader fear among retirees of running out of money. Allianz reported earlier this year that 67% of investors surveyed were more concerned about outliving their savings than about dying. The financial turbulence experienced by retirees since the pandemic has further exacerbated these fears, with inflation remaining above the Federal Reserve’s 2% target and market volatility causing retirement balances to fluctuate.
The top 5 financial concerns among retirees, along with the percentage of retirees who expressed them, according to Schroders survey are:
- Inflation eroding retirement savings and assets (90%)
- Higher than expected health care costs (87%)
- Market downturn reducing assets (81%)
- Uncertainty about retirement income and asset drawdown (69%)
- Fear of outliving retirement savings (68%)
No Second Chances
With inflation rates on the rise and energy costs soaring, retirees relying heavily on Social Security are feeling the pinch. The 2026 cost-of-living adjustment for Social Security was 2.8%, below April’s inflation rate, resulting in a loss of purchasing power for beneficiaries. This fixed pool of assets leaves retirees with no room for error in navigating the affordability crisis.
Retiring Before You’re Ready
Another study by Allianz revealed that 6 in 10 Americans worry they won’t be able to retire on their own terms. Unexpected circumstances often force individuals to retire earlier than planned, leading to financial strain. Contingency planning becomes crucial in such situations, as retirees must navigate unexpected expenses like health care costs and lack of income during the transition to retirement.
These risks highlight the importance of having a solid financial plan in place. Despite the challenges, nearly half of Americans lack a written financial plan, emphasizing the need for proactive financial management. Planning ahead and considering potential scenarios is key to ensuring a secure retirement without the fear of outliving savings or financial instability.
