Retirement delays, Social Security fears prompt advisors to rethink income strategies

As a record number of Americans approach retirement age in what the Alliance for Lifetime Income calls the “Peak 65” milestone, a growing share are putting off retirement and reconsidering how they’ll generate income.

Financial advisors are responding by shifting more client portfolios toward annuities and other forms of protected income, according to new data from the group’s 2025 Protected Retirement Income and Planning study.

The annual survey, conducted with IPSOS, gathered responses from 3,502 consumers ages 45 to 75 and 500 financial professionals. The findings highlight an atmosphere of caution, with 30% of consumers ages 61 to 65 saying they are now considering delaying retirement, and more than half expressing doubts about the future of Social Security.

“Many of those belonging to the largest wave of retirement age Americans are hitting the pause button,” Jason Fichtner, executive director of the Alliance’s Retirement Income Institute, said in a statement Wednesday. “The Peak 65 surge, chaotic changes at the Social Security Administration, and heightened fears over Social Security’s future are a trifecta of worries prompting many to claim benefits early.”

Among consumers polled, 58% said they feared their Social Security benefits would be reduced, and 52% said their confidence in the program had fallen compared with five years ago. Meanwhile, 14% are definitely considering claiming earlier than planned, with another 21% somewhat considering the same.

The survey also found that financial professionals are adapting to these shifts. Two-thirds of advisors said they have changed their retirement planning approach in the past year. Half reported increasing allocations to annuities, while a third said they were investing more in Treasuries. Equities remained flat, with 30% saying they were increasing exposure and another 30% reducing it.

“Just as businesses hesitate to make big moves in times of economic uncertainty, many working Americans are afraid of taking the leap into retirement,” said Jean Chatzky, education fellow at the Alliance and CEO of HerMoney. “With so many looking for greater retirement security, it’s no surprise that half of financial advisors now say they’re adding protected income from annuities to their client’s portfolios.”

The study shows this trend is gaining traction with investors as well: 64% of consumers said they would put a $100,000 windfall into an annuity rather than the stock market. Yet advisors remain split, with 62% saying they would still recommend equities for such a windfall.

Concerns about inflation and healthcare remain top of mind for pre-retirees, with 67% and 60% of respondents citing those as their leading financial concerns. Health-related quality of life issues, such as cognitive decline or loss of independence, were also widely cited.

Just 34% of consumers reported having a detailed retirement plan. Those working with an advisor were far more confident, with 70% saying they felt on track to retire securely, compared with only 35% of Gen X respondents and 49% of Peak 65 consumers overall.