For many Americans, the traditional vision of a self-directed retirement on a chosen timeline is becoming increasingly unattainable. A convergence of new research from Schroders, Allianz Life, and Western & Southern Financial Group paints a stark picture: retirees are grappling with costs that outpace expectations, workers are leaving the labor force earlier than planned and often involuntarily, and savings are insufficient to cover extended lifespans.
Schroders' 2026 US Retirement Survey found that 49% of retirees report expenses running higher than anticipated, while 58% are uncertain how long their savings will last. Inflation tops retiree concerns, with 90% expressing worry about its erosion of purchasing power. Healthcare costs rank second at 87%, followed by market downturns at 81%. On average, retirees allocate 16% of monthly income to healthcare, including premiums and out-of-pocket costs, and a majority say Medicare has covered less than expected. Only 32% of retirees work with a financial advisor, and 64% wish they had planned more before retiring.
Deb Boyden, Head of US Defined Contribution at Schroders, noted, “Retirees are fighting the affordability crisis with a fixed pool of assets and no second chances. Investing for retirement and investing in retirement are fundamentally different challenges.” She emphasized that with lifespans extending into the 80s and beyond, savings may need to support three or four decades of retirement.
Retirees’ self-assessments underscore the strain: only 4% describe themselves as “living the dream,” 37% as comfortable, 35% as “not great but not bad,” 19% as struggling, and 5% as “living the nightmare.” That means roughly one in four retirees faces genuine financial distress. Despite this, nearly 80% say retirement has given them freedom to pursue passions, and two-thirds report new experiences, suggesting financial hardship and personal fulfillment can coexist.
Allianz Life’s 2026 Annual Retirement Study reveals that retirement timing is often beyond workers’ control. Among retired respondents, 42% left the workforce early, while only 5% retired later than planned. The top reasons for unplanned early exits were health problems (30%), unexpected job loss (21%), and reaching financial readiness sooner than expected (21%). In contrast, working Americans most often cite wanting more time with family (36%) or reaching financial readiness (32%) as anticipated triggers. Kelly LaVigne, VP of consumer insights at Allianz Life, warned, “When retirement comes early, it can quickly turn a solid plan into a fragile one.”
Eight in ten respondents believe extending their careers would help fund their desired retirement lifestyle. However, more than a third would treat a job loss in the next six months as a signal to retire outright, with baby boomers especially vulnerable: 58% would call it a career under those conditions, compared with roughly 30% of Gen Xers and millennials. Additionally, 54% worry that cognitive decline could cut short their ability to work as long as hoped.
Western & Southern Financial Group’s research highlights serious financial consequences. Among surveyed adults, the average expected lifespan is 85, but savings are projected to run dry at 79, creating a six-year longevity gap. Over one in four face a shortfall of a decade or more. Millennials face a seven-year gap, with median savings of $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% expect to reach age 90 or beyond, yet only 16% plan for a retirement lasting 30 years or more.
Compounding these shortfalls, 82% of respondents had not modeled inflation or rising healthcare costs into their plans. Nearly half were unaware whether Medicare covers long-term care costs such as nursing home stays or in-home aides—it does not. Three in ten had no plan for funding full-time care in their eighties. Nearly 60% of Americans worry they won’t be able to maintain their lifestyle in retirement, according to Allianz data.
For advisors, these findings underscore the need for comprehensive retirement income planning that accounts for longevity, healthcare expenses, and the risk of involuntary early retirement. As Vanguard Research emphasizes, retirees need an income strategy, not just a savings target. Similarly, Corebridge’s survey found that 56% of retirees fear outliving savings more than dying with money left over, highlighting the psychological toll of longevity risk.
