Retirement is often thought of as a time of life when you get to sit back, relax, indulge your hobbies and enjoy the fruits of your labor, but a new survey from Schroders says that for many Americans, that’s not the case.
Schroders 2025 U.S. Retirement Survey says that just 5% of retirees say that they are “living the dream.” By contrast, a shocking 19%, or almost one in five, say they are “living the nightmare”.
This gap highlights a harsh truth: many Americans are falling short of the savings needed to support a comfortable retirement. While Northwestern Mutual research suggests the average person believes they’ll need around $1.26 million to retire comfortably, Fidelity reports the average 401(k) balance among those 70 and up is just $250,000. And according to Federal Reserve data, only 3.2% of all retirees have $1 million or more saved.
This is simply not enough for many seniors, especially with many financial concerns to worry about. Let’s take a look at why so many are struggling, along with how future retirees can avoid falling victim to this same fate.
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Why so many retirees are struggling
The Schroders survey makes clear that the stress comes from several fronts: inflation, health care and uncertainty about how long savings will last.
More than 8 in 10 worry about how rising costs are shrinking their purchasing power, and nearly half admit their day-to-day expenses in retirement have turned out higher than expected. And 47% of adults aged 50 and older responded to National Polling on Healthy Aging reporting that they’ve been impacted a great deal by inflation in the past year.
Healthcare is another financial stress point. Many seniors are forced into early retirement due to health crises, while others develop a medical issue sooner than anticipated and face high care costs. Fidelity reports the average cost of healthcare for a single 65-year-old person who retires in 2025 is $172,500, and retirees reported spending an average of 15% of their income on medical costs like insurance premiums and prescriptions, with more than half saying they thought Medicare would cover more.
Uncertainty about longevity is compounding these pressures. A majority of retirees — 62% — admit they have no idea how long their savings will last. And with 70% worried about outliving their assets and 80% fearful a market downturn could wipe out a big chunk of their nest egg, it’s clear why so many describe their financial reality as a nightmare rather than a dream.
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How to avoid ‘living the nightmare’
For workers who haven’t retired yet, the best defense is a proactive plan.
That begins with knowing your retirement number: how much you’ll actually need to maintain your lifestyle. Financial planners often suggest saving at least 10 times your final salary or multiplying your expected annual spending by 25. If you want $80,000 a year in retirement, that means building toward a $2 million nest egg.
Once you know the goal, break it into smaller, achievable milestones. Online calculators at sites like Investor.gov can help you figure out how much to contribute each month based on your age, income and existing savings. Even modest amounts saved consistently can snowball over decades thanks to the power of compound growth.
Building your savings also means using the right accounts and strategies. A 401(k) with an employer match should be your first stop, followed by IRAs for added tax advantages. And because retirement planning is complex, one of the smartest moves you can make is to consult with a financial advisor, who can help you craft a plan that accounts for taxes, market risk and unexpected costs.
Finally, don’t forget that preparing for retirement isn’t just about saving — it’s about protecting yourself against uncertainty. That means creating an emergency cushion and being alert to financial traps. You should be wary of any communication that asks you to:
Provide your Social Security number
Reveal a password or account number
Send money directly or through gift cards, crypto or wire transfer
The Schroders survey is ultimately a reminder that retirement isn’t just about reaching a number on paper — it’s about preparing for the realities that can upend even the best-laid plans. With inflation, health care and uncertainty weighing heavily on today’s retirees, the survey underscores how critical it is to approach retirement with foresight, flexibility and support.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
