How long will my retirement savings last? Most Americans can't answer that

The impact of inflation on Americans’ retirement savings is clear and it remains a key concern of retirees and those who are planning their retirement years.

Inflation is the most cited concern among 1,500 US investors nationwide ages 29-79, including 373 retired Americans, in a survey conducted on behalf of Schroders. It found that 84% wish they could better protect their retirement savings from inflation.

More than six in ten respondents admitted that they do not know how long their retirement savings will last them, although only 40% believe they have enough saved. Meanwhile, 45% of those already retired say expenses have been higher than they had expected, especially healthcare with retirees reporting spending an average of 15% of their total monthly income on healthcare costs such as insurance premiums, prescription costs, and out-of-pocket expenses. 

Concern about inflation was cited by 92%, up from 89% last year, while healthcare costs (86%) are in line with 2024. There is increased concern about a market downturn significantly reducing assets (80% now vs. 76% in 2024).

“Rising prices on essentials like housing, food, and healthcare have significantly diminished the purchasing power and financial security of retirees,” said Deb Boyden, Head of U.S. Defined Contribution at Schroders.  “The uncertainty that’s currently plaguing so many retirees is a poignant reminder of the value of proper planning, products and personalized advice for a comfortable retirement.”

Retirees are mostly positive about their retirement experience although a quarter have lost sleep worrying about their financial situation, and 27% spend an hour or more per day worrying about money. However, 64% said they do not work with a professional advisor.

Asked to describe their financial situation in retirement:

• 5% say they are “living the dream”
• 37% are “comfortable”
• 39% are “not great but not bad”
• 16% are “struggling”
• 3% are “living the nightmare”

“The path to closing the retirement savings gap is paved with better planning, products, and access to advice,” said Boyden.  “As pension plans continue to be replaced by defined contribution plans like the 401(k), the importance of being proactive in saving and planning for retirement cannot be overstated.  It’s one of the greatest challenges and opportunities facing plan participants and the firms striving to provide solutions that can improve their retirement readiness.”