Just 5% of Retirees Say They’re Living the Dream: Key Insights

A recent survey by Schroders reveals a stark reality for many retirees in the United States. Only 5% of retirees report that they are “living the dream,” while a concerning 19% describe their situation as a “nightmare.” This data highlights a significant gap between expectations and the financial realities faced by many seniors.

The 2025 U.S. Retirement Survey conducted by Schroders indicates that a majority of retirees are grappling with financial stress stemming from inflation, healthcare costs, and uncertainty regarding the longevity of their savings. While many Americans believe they will need approximately $1.26 million to retire comfortably, research from Fidelity shows that the average 401(k) balance for those aged 70 and above is only $250,000. This insufficient amount raises concerns over the ability of retirees to maintain their desired lifestyle.

Understanding the Struggles of Retirees

The survey highlights several factors contributing to financial anxiety among retirees. Over 80% of participants expressed worry about rising costs eroding their purchasing power. Nearly half admitted that their day-to-day expenses during retirement have exceeded their initial expectations.

Healthcare emerges as a critical issue. The average cost of healthcare for a single retiree aged 65 in 2025 is projected to be $172,500. Many retirees find themselves spending about 15% of their income on medical expenses, including insurance premiums and prescriptions. A significant portion of this group expected Medicare to cover more than it does, leading to financial shortfalls.

In response to these challenges, long-term care insurance is increasingly being recognized as a vital tool for managing healthcare costs. Various plans are available, allowing individuals to cover expenses related to nursing homes, assisted living facilities, and in-home care.

Strategies for Future Retirees

For those not yet retired, proactive planning is essential to avoid ending up among those expressing dissatisfaction. Financial planners advise individuals to determine their “retirement number”—the amount needed to sustain their desired lifestyle. A common guideline is to aim for savings equivalent to at least ten times one’s annual salary or to multiply expected yearly spending by 25. For example, if you wish to draw $80,000 annually in retirement, you would need to build a nest egg of approximately $2 million.

Once a target is set, breaking it down into manageable milestones can make the process less daunting. Consistent savings, even in modest amounts, can accumulate significantly over time thanks to compound growth.

In addition, utilizing the right investment accounts is crucial. Starting with a 401(k) that includes employer matching contributions should be a priority, followed by options like Individual Retirement Accounts (IRAs), including Roth IRAs or gold IRAs. Companies such as Priority Gold provide services for those interested in converting existing IRAs into gold IRAs, offering free rollovers and storage.

Engaging with a financial advisor can further enhance retirement planning. Advisors can assist in developing a comprehensive plan that accounts for taxes, market risks, and potential unexpected costs. It is advisable to choose pre-vetted fiduciaries who are legally bound to act in the client’s best interest.

Preparing for retirement also involves creating a financial buffer. Establishing an emergency fund in a readily accessible account can provide peace of mind. SoFi offers a fee-free checking account with competitive interest rates that can help maintain liquidity.

Another innovative approach to retirement savings involves utilizing apps like Acorns, which allow users to invest spare change from everyday purchases. After linking a bank account, Acorns rounds up purchases to the nearest dollar and invests the difference, making saving seamless and automatic.

The findings from the Schroders survey serve as a crucial reminder that achieving a comfortable retirement requires careful planning and preparation. With the pressures of inflation, rising healthcare costs, and uncertainty looming large, it is essential for future retirees to approach their retirement strategy with foresight, flexibility, and the right support.