SouthernWorldwide.com – New research indicates that retirees are facing significant financial anxieties, with inflation, escalating healthcare expenses, and the fear of outliving their savings being the primary concerns. Approximately one in five retirees report experiencing financial difficulties.
The increasing cost of living has emerged as the most pressing issue for retirees. A survey conducted by investment firm Schroders, which polled around 400 retirees, revealed that nearly 90% are worried about inflation diminishing the value of their assets.
This concern is closely linked to a broader apprehension among retirees: the possibility of their funds running out. Earlier this year, a study by Allianz found that 67% of surveyed investors expressed greater concern about outliving their savings than about death itself, according to Kelly LaVigne, vice president of consumer insights at Allianz Life, in a statement to CBS News.
These findings highlight the financial instability many retirees have encountered since the pandemic. Inflation has remained persistently above the Federal Reserve’s target of 2%, and market volatility has led to fluctuations in retirement account balances. The Schroders survey also indicated that one in five retirees are currently facing financial struggles.
“Consider that retirement funds are meant to last for 30 years. Even at a conservative inflation rate of 3%, the cost of living will double in 24 years,” LaVigne explained. “An income that seemed adequate at the beginning of retirement could become insufficient after three decades.”
According to the Schroders research, retirees’ top five financial concerns, along with the percentage of retirees who expressed these worries, are as follows:
- Inflation eroding the value of retirement savings and other assets (90%)
- Higher than expected health care costs (87%)
- A major market downturn significantly reducing assets (81%)
- Not knowing how to best manage retirement income and/or withdraw assets (69%)
- Outliving retirement savings (68%)
No second chances
Inflation is at the forefront of retirees’ minds, compounded by rising energy prices that exacerbate affordability issues. The Consumer Price Index saw a 3.8% increase in April compared to the previous year, marking the fastest rise in nearly three years.
Seniors who depend heavily on Social Security are already feeling the pinch. Their 2026 cost-of-living adjustment (COLA) of 2.8% was lower than April’s inflation rate, meaning their Social Security benefits have lost purchasing power. Some experts anticipate a COLA of almost 4% for 2027, though any increase would not be applied until January.
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“Retirees are battling an affordability crisis with a fixed pool of assets and no opportunity for a do-over,” stated Deb Boyden, head of U.S. defined contribution at Schroders.
Retiring before you’re ready
A separate Allianz study on retirement revealed that six out of ten Americans are concerned about not being able to retire on their own terms. This survey included 1,000 individuals over the age of 25 with household incomes of at least $50,000 or investable assets of at least $150,000.
While individuals typically have a target retirement age, Allianz’s research found that 42% of Americans retire earlier than planned. These early retirements are often due to circumstances beyond their control, such as health issues that prevent them from working or unexpected job losses.
“You might think, ‘I’ll retire at 65 or 67,’ but then something happens, and you find yourself retiring at 62,” LaVigne told CBS News. “Even with advance planning, not having a contingency for ‘what if I don’t make it to that age’ is a significant issue and can drastically alter everything.”
For example, someone planning to retire at 65 but compelled to stop working at 62 not only needs to fund three additional years of retirement but also secure health insurance for those three years before becoming eligible for Medicare.
“Now you’re facing unexpected health care costs in addition to a loss of income, putting you in a difficult situation because this wasn’t part of the original plan,” LaVigne added.
These potential risks, from premature retirement to persistent inflation, underscore the critical importance of contingency planning, according to LaVigne. Approximately half of Americans, including nearly six in ten Gen Xers, do not have a written financial plan.
“You need to approach this like a part-time job, because it’s your only real opportunity,” LaVigne emphasized. “You won’t be able to return to work at the age of 82.”
