How to create a plan
Even as record numbers of Americans reach retirement age, many adults have not considered the impact of inflation and Social Security benefits on their financial future.
According to a new global survey from Prudential, 89% of wealthy U.S. adults surveyed said they were confident they could afford basic expenses in retirement. But rising housing, food and healthcare costs are weighing on savings, and only 55% of U.S. respondents said they account for inflation in their retirement plans.
Caroline Feeney, Prudential’s global head of pensions and insurance, said it was a “confidence paradox”: “Feeling ready is very different from actually being ready.”
“People feel prepared, so they don’t take the necessary actions and plans now to start saving, and they turn to closing a real retirement gap for their future that they don’t realize they have,” he said.
This is an important distinction, especially considering that baby boomers have reached “peak 65.” More than 11,200 people I’m turning 65 every day through 2027, according to a January 2024 article from the Lifetime Income Alliance.
The consumer price index, the main inflation indicator, increased by 3 percent in September compared to the previous year. Bureau of Labor Statistics.
Meanwhile, the Social Security cost-of-living adjustment for 2026 will be 2.8%. The regulation, which aims to help ensure benefits remain in line with inflation, will add an average of $56 per month to retirement benefit payments starting in January.
However, according to research by Goldman Sachs Asset Management, retirees’ spending has outpaced inflation in recent years. Prudential’s survey found that 63% of U.S. respondents are concerned about the ability of government programs like Social Security to pay benefits when they retire.
Prudential’s survey, conducted online by the Brunswick Group in August, surveyed 4,200 adults aged 30 and over in the United States, Brazil, Mexico and Japan. Participants had investable assets of $100,000 or more or the equivalent amount in each country.
How can you better understand your retirement needs?
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Certified financial planner says many people are initially ‘very optimistic’ about their retirement Uziel Gomez, founder of Primeros Financial in Los Angeles, works primarily with Gen Z and Millennial clients.
“They think they can cut back on spending when they retire,” said Gomez, a member of CNBC’s Council of Financial Advisors. “In reality, they often spend more because they have more time to do many of the things they enjoy doing.”
More than half of Americans, 54% new survey Major Financial Group said they believe their financial situation will improve throughout their lives, but the same share still fear their savings will be depleted when they retire. The survey surveyed 1,000 U.S. adults in spring 2025 who identified themselves as having sole or shared responsibility for household financial decisions.
“If half of the people feel like they’re doing well on their own, I think what they really want is more tools to get them through retirement. But the other half have very low confidence that they’ll achieve their goals and need more incentive to save,” said Kamal Bhatia, president and CEO of Principal Asset Management. “Most people don’t have a good idea of what they really need to both save money and make ends meet.”
Retirement concerns tend to be greatest among Americans approaching retirement. According to the principal survey, nearly 70 percent of Gen Xers ages 44 to 59 and 50 percent of baby boomers ages 60 to 78 said they do not believe their savings are enough to cover their retirement.
Working with a financial advisor can help you create a clear plan and take the necessary steps to stay on track and stay on track.
In the Prudential survey, 93% of all respondents who worked with a financial advisor said they were confident their basic retirement expenses would be covered, compared to 83% of those without one. When asked about covering non-essential expenses, the confidence gap widened further, between 86% and 68%.
Free online retirement calculators can also help you check if your savings are on target. These include options offered by government agencies. Social Security Administration And Ministry of Laboras well as tools of financial companies such as Manager, Cautious And Pioneeramong others.
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