For many retired Americans, the pressure of rising living costs is no longer a temporary challenge — it has become a defining feature of retirement itself.
A growing number of retirees report that their day-to-day expenses are significantly higher than they anticipated when they left the workforce. Recent survey data from Schroders highlights the extent of the issue, with nearly 60% of retirees admitting they are uncertain how long their retirement savings will last. For wealth advisors and RIAs, the findings underscore a critical reality: retirement planning can no longer focus solely on accumulation. Sustainable income planning, inflation management, and long-term spending resilience have become central to the client experience.
“The affordability crisis is a daily struggle for many retirees,” said Deb Boyden, Head of U.S. Defined Contribution at Schroders. “With nearly half of retirees reporting their expenses are higher than anticipated, it’s clear many entered retirement without a plan for managing rising costs.”
The data reflects a widening gap between retiree expectations and financial reality. While many clients approach retirement believing their expenses will decline over time, inflation and elevated costs across essential categories are challenging that assumption. Housing, food, insurance, transportation, and healthcare continue to absorb larger portions of fixed retirement income, leaving many households with limited flexibility.
Healthcare costs remain one of the most significant pain points. Retirees surveyed reported spending an average of 16% of their monthly income on medical expenses, including insurance premiums, prescriptions, and out-of-pocket care. Many also acknowledged they underestimated how much healthcare would cost in retirement, with nearly two-thirds expecting Medicare to cover a substantially larger share of expenses than it actually does.
The disconnect points to an ongoing planning challenge for advisors. Healthcare inflation consistently outpaces broader inflation, yet many retirement income strategies still fail to adequately account for long-term medical costs, extended care needs, and rising insurance expenses. As longevity increases, healthcare spending risk becomes even more difficult to ignore.
“Many seniors already forgo essentials like medical care because they can’t keep up with rising costs,” said Shannon Benton, Executive Director of The Senior Citizens League.
For advisors, these concerns represent more than isolated budgeting issues. They reflect broader anxieties around retirement security and financial independence. According to the survey, retirees’ top financial fears include inflation, healthcare expenses, major market downturns, uncertainty around withdrawal strategies, and the persistent concern of outliving their assets.
The findings reinforce what many RIAs are already seeing in client conversations. Retirees are increasingly worried not just about investment performance, but about the sustainability of their income plans under prolonged economic pressure. Market volatility, combined with elevated living costs, has intensified concerns around sequence-of-returns risk and the long-term viability of traditional withdrawal assumptions.
Importantly, many retirees appear uncertain about how to convert accumulated savings into dependable income. This transition from accumulation to decumulation remains one of the least understood aspects of retirement planning for clients. Questions surrounding withdrawal rates, tax-efficient income strategies, Social Security timing, healthcare funding, and portfolio preservation are becoming more urgent as retirees confront higher monthly expenses.
For wealth advisors, the opportunity lies in addressing these concerns proactively. Clients increasingly need comprehensive retirement income frameworks that extend well beyond portfolio construction. Stress testing retirement plans against inflation scenarios, healthcare shocks, and market drawdowns is becoming essential to maintaining client confidence.
The emotional impact of financial stress is also becoming impossible to ignore. More than one-third of retirees surveyed said they worry financial strain could negatively affect their overall health. Nearly three in 10 reported losing sleep over financial concerns and thinking about money stress every day.
This growing emotional burden presents another important dynamic for advisors. Financial insecurity in retirement is no longer simply a balance sheet issue — it is directly influencing retirees’ quality of life, emotional well-being, and sense of stability. Advisors who can provide clarity, structure, and ongoing guidance may play an increasingly valuable role not only in financial planning, but also in reducing client anxiety during retirement.
When retirees were asked to describe their current financial situation, only 4% said they were “living the dream.” Another 37% described themselves as “comfortable,” while 35% characterized their circumstances as “not great, but not bad.”
The relatively small percentage of retirees expressing complete financial confidence highlights a broader issue across the retirement landscape. Even households that are technically stable may still feel vulnerable in the face of inflation, healthcare uncertainty, and market instability. This perception gap matters because retirees’ confidence levels often shape spending behavior, investment decisions, and long-term financial outcomes.
For RIAs, these findings reinforce the importance of communication and expectation management throughout retirement. Many clients may have sufficient assets on paper, yet still feel uncertain about whether their financial plan can withstand future economic stress. Advisors who regularly revisit cash flow assumptions, spending patterns, and income sustainability may be better positioned to strengthen client trust and engagement.
The survey also highlights a larger industry challenge: many Americans are entering retirement without fully understanding the financial realities they will face over the next 20 to 30 years. Inflation shocks over the past several years have exposed weaknesses in retirement assumptions that were built during a prolonged period of lower inflation and relatively stable markets.
Traditional retirement planning models often relied on static spending assumptions and predictable market environments. Today’s retirees, however, are navigating a far more complex landscape marked by elevated costs, healthcare uncertainty, longer life expectancies, and heightened market volatility. As a result, retirement income planning is evolving into a more dynamic and ongoing process.
“It should be a wake-up call for retired Americans who have no idea how long their savings will last,” Boyden said. “Retirement planning doesn’t end once someone stops working. The real challenge begins afterward — creating a strategy for income, inflation, market volatility, and unexpected expenses.”
That shift has important implications for advisory firms. Retirement planning can no longer be treated as a one-time milestone completed at the point of retirement. Instead, advisors are increasingly expected to serve as long-term partners helping clients adapt to changing economic conditions throughout retirement.
Areas such as guaranteed income strategies, tax-aware withdrawals, healthcare planning, and contingency preparation are becoming more central to the advisory conversation. Clients are also seeking greater personalization around spending flexibility, legacy goals, and lifestyle preservation amid uncertain economic conditions.
The findings may also accelerate demand for holistic planning services. Retirees are looking for more than investment management — they want guidance that connects portfolio decisions to real-world spending needs and financial security. Advisors who can demonstrate how different income strategies hold up under inflationary pressure or healthcare shocks may have a significant advantage in client retention and relationship growth.
At the same time, the survey underscores the need for improved financial education around retirement spending realities. Many retirees continue to underestimate healthcare costs, overestimate the role of Medicare, or assume expenses will naturally decline with age. These misconceptions can create planning gaps that become increasingly difficult to correct later in retirement.
For RIAs, early and ongoing education may be one of the most valuable services they can provide. Helping clients understand the long-term impact of inflation, longevity, taxes, and healthcare expenses can improve preparedness before retirement begins. It can also create more realistic expectations around sustainable withdrawal rates and spending flexibility.
Ultimately, the data reflects a retirement environment that is becoming more financially and emotionally demanding for many Americans. Rising costs are forcing retirees to reevaluate spending habits, rethink financial priorities, and confront uncertainty about the future. For wealth advisors, the message is clear: clients need more comprehensive retirement guidance than ever before.
As inflation, healthcare expenses, and longevity risks continue reshaping retirement, the role of the advisor is evolving alongside them. The firms that can deliver personalized income planning, ongoing financial coaching, and proactive risk management may be best positioned to help retirees navigate an increasingly uncertain financial landscape with greater confidence and resilience.
