From rising medical costs to $5 gas, retirees face new financial fears in 2026. But what are the five things that worry them the most about money?
A new retirement survey from Schroders, a global asset management firm, finds that the No. 1 concern among American retirees is — you may have guessed it — inflation. Nearly 90% of retirees in the survey said they were at least somewhat concerned about the impact of inflation on their assets.
“More than five years after the start of the worst US inflation in a generation, the impact of inflation continues to worry retirees,” the company said in a statement released Tuesday sharing the results of a poll of 1,500 investors, including 382 retirees.
Here are some things that keep retirees up at night:
Inflation reduces the value of their assets
The annual inflation rate rose to 3.8% in April, from 3.3% in March, according to the consumer price index. That’s the highest rate in nearly three years. Given that many live on a fixed income, retirees are concerned about what it means for the value of their savings and investments.
“Retirees are struggling with the problem of not being able to cover costs with limited assets and no second chances,” said Deb Boyden, head of US investment advisory at Schroders, in a release.
Financial experts often recommend that retirees include various inflation hedges, such as Treasury Inflation-Protected Securities, in their investment portfolios. Savings rates on I-bonds and certificates of deposit (CDs) also tend to rise with inflation, making them attractive options for retirees.
Higher than expected medical expenses
A Schroders survey found that American retirees reported spending 16% of their income on medical expenses, while most said Medicare paid less than they thought.
Budgeting for health care expenses is one of the keys to a happy retirement, and having an emergency fund can take some of the stress away. If you have long-term care insurance or a health savings account, that plays to your advantage. Self-insurance is another option.
A market downturn hurts their portfolio
The S&P 500 is up nearly 27% over the past year, but the stock market’s recent performance hasn’t stopped retirees from worrying.
Four out of five retirees say they are at least somewhat concerned about a major stock market crash wiping out much of their accumulated wealth. Investors are generally advised to reduce their stock exposure as they age and their risk tolerance increases. A well-designed retirement investment portfolio can provide security even if the economy takes a hit.
“What is often overlooked is that investing for retirement and investing for retirement are very different challenges,” says Boyden. “In retirement, protection against losses is as important as taking benefits.”
Not knowing the best way to draw
Coming in at number four in the Schroders report, a large proportion of retirees indicated that they are unsure about the best way to spend their retirement savings.
Tax laws, distribution strategy and retirement budgeting are all really challenging topics. A financial professional can help, as can personal finance books and blogs and resources like our Retire with Money paper.
Exceeding their money
Predicting life expectancy is a notoriously tricky piece of retirement planning. While any number of online calculators can take input and give you a sense of how long you might live, most people aim to build a nest egg that will support them even if they live meaningfully longer than average.
According to the survey, 49% of retirees find that their expenses end up being higher than they thought, and more than half “don’t know how long their savings will last.”
To avoid running out of money in retirement, experts suggest paying off high-interest loans, consider supplementing your income with a side gig and stick to a budget. Even in adulthood, success depends on personal finance 101s.
