The retirement most Americans envision, one they choose, on a timeline they control, is looking increasingly like a luxury.
A flurry of new research reveals that retirees are already grappling with costs that have outpaced their expectations, workers are leaving the labor force sooner than planned and often involuntarily, and too few people have saved enough to outlast their own lives.
First, Schroders' 2026 US Retirement Survey found that nearly half of retirees report their expenses in retirement are running higher than anticipated, and 58% don't know how long their savings will hold out.
The top concern weighing on current retirees is inflation eroding the purchasing power of their assets, with 90% expressing at least some worry. Elevated healthcare costs rank second at 87%, followed by a major market downturn significantly reducing assets (81%).
On average, retirees in the Schroders survey are devoting 16% of their total monthly income to healthcare alone including premiums, prescriptions, and out-of-pocket expenses, and the majority say Medicare has covered far less of those costs than they had expected.
However, only 32% of retirees surveyed currently work with a financial advisor, and 64% wish they had done more planning before leaving the workforce.
"Retirees are fighting the affordability crisis with a fixed pool of assets and no second chances," said Deb Boyden, Head of US Defined Contribution at Schroders. "What often gets overlooked is that investing for retirement and investing in retirement are fundamentally different challenges. Once you retire, protecting against losses is just as important as capturing gains. With lifespans extending well into the 80s and beyond, your savings may need to work for you for three or four decades."
Retirees' own descriptions of their financial circumstances tell a stark story. Just 4% say they are "living the dream," while 37% describe themselves as comfortable, 35% say things are "not great but not bad," 19% say they are struggling, and 5% say they are "living the nightmare" — meaning roughly one in four retirees is in genuine financial distress.
Despite those pressures, retirement is delivering something meaningful for many who have reached it. Nearly four in five retirees say it has given them the freedom to pursue passions and hobbies, and more than two-thirds say leaving the workforce opened the door to experiences they had never had before. Financial hardship and personal fulfillment, it turns out, are not mutually exclusive.
Those already in retirement are not the only ones at risk as Allianz Life's 2026 Annual Retirement Study finds that the timing of retirement itself is frequently beyond workers' control.
An early exit from working life can be financially devastating, with 42% of retired respondents having left the workforce ahead of schedule, while only 5% retired later than they had planned.
The most common reasons for unplanned early departure were health problems that prevented people from continuing to work (30%), unexpected job loss (21%), and reaching financial readiness sooner than expected (21%).
That last reason stands in sharp contrast to what still-working Americans imagine their early retirement trigger would be. Those not yet retired assumed the most likely reason they'd leave the workforce early would be wanting more time with family (36%), reaching financial readiness ahead of schedule (32%), or seeking relief from professional stress (31%). The gap between expectation and reality underscores how unprepared many people are for the disruptions that ultimately derail their plans.
"When retirement comes early, it can quickly turn a solid plan into a fragile one," said Kelly LaVigne, VP of consumer insights at Allianz Life. "That's because fewer working years and more retirement years can put significant pressure on savings—especially when early retirement isn't a choice."
Eight in ten of those who took part in the Allianz survey believe extending their careers would help fund the retirement lifestyle they want.
But more than a third of respondents said they would likely treat a job loss in the next six months as a signal to retire outright, with baby boomers especially susceptible: 58% said they'd call it a career under those conditions, compared with roughly 30% of Gen Xers and millennials. Another 54% expressed concern that cognitive decline could cut short their ability to remain employed as long as they hope.
Those involuntary exits carry serious financial consequences, particularly given how much longer Americans are actually living and how poorly many have planned for extended lifespans.
Recent research from Western & Southern Financial Group found that among surveyed adults, the average expected lifespan is 85, yet savings are projected to run dry at 79. That six-year longevity gap widens considerably for a meaningful share of respondents: more than one in four face a projected shortfall of a decade or more.
Millennials surveyed face a seven-year gap on average, with median savings of just $70,000 expected to be exhausted by age 75 against a projected lifespan of 82. Gen Xers face a six-year gap, and baby boomers four years. Meanwhile, 35% of respondents expect to reach age 90 or beyond, yet only 16% are planning for a retirement lasting 30 years or more.
Compounding those shortfalls is a widespread failure to account for the costs most likely to consume savings in late retirement. Western & Southern found that 82% of respondents had not modeled inflation or rising healthcare expenses into their retirement plans. Nearly half were unaware — or unsure — whether Medicare covers long-term care costs such as nursing home stays or in-home aides. It does not. Three in 10 had no plan at all for how they would fund full-time care in their eighties.
Back in the Allianz data, nearly 60% of Americans worry they won't be able to retire on their own terms, with insufficient savings cited as the primary obstacle.
"It's important that your retirement strategy ensures your money lasts your lifetime – even if retirement starts sooner than you planned," LaVigne says. "A financial professional can help you manage risks and build flexibility into a strategy that can adapt when plans change."
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