A whopping 62% of retired Americans have no clue how long their nest egg will last — and many blame climbing costs

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Between retirement savings and Social Security income, do you know how long your nest egg will last?

According to a new survey (1) commissioned by asset management firm Schroders, 62% of retired Americans don’t know how long their savings will last. While 40% are confident they have enough money, 45% say their expenses in retirement are higher than they expected. Almost 20% of older Americans, those over the age of 65, have also returned to the labour force for either personal or economic reasons, according to the Bureau of Labor Statistics (2).

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The reason for these eye-popping numbers? A growing number of U.S. retirees are worried about the impact of rising prices on everything from commodities to healthcare.

What fuels retirement anxiety

Concerns about rising prices among retirees stem from several factors. Here are the top five worries cited by retired Schroders survey respondents.

1. Inflation eroding savings: 92% are worried about cost-of-living increases impacting asset value. 2. Health care costs exceeding expectations: 86% are concerned about the cost of medical bills in retirement. 3. A steep market downturn: 80% flagged a significant downturn in the market as a major worry. 4. Confusion over how to draw down savings: 71% are uncertain about an optimal spending and income-generating strategy. 5. Outliving their money: 70% of respondents fear longevity.

“Rising prices on essentials like housing, food and health care have significantly diminished the purchasing power and financial security of retirees,” Deb Boyden, head of U.S. defined contributions at Schroders, said in a statement.

In addition, 84% of retirees wish they could better protect their savings from inflation impacts.

Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)

Diversify income and asset streams

Adding inflation-resistant assets to your portfolio can help. For example, Treasury Inflation Protected Securities (TIPS) are sold for 5-, 10- or 30-year terms and offer fluctuating principals over that time. At maturation, if the principal is higher than the original amount, the increased amount stands, but if the principal is equal to or lower than the original amount, the original amount stands.

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Dividend-growing equities and annuities are other options to explore that can bolster fixed income sources against rising prices.

Then there’s real estate, which to many means buying a house. However, there are other options besides buying a property outright — especially in other real estate verticals aside from residential.

For instance, direct access to the $22.5 trillion commercial real estate sector has been limited to a select group of elite investors — until now.

First National Realty Partners (FNRP) allows accredited investors to diversify their portfolio through grocery-anchored commercial properties, without taking on the responsibilities of being a landlord.

With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to triple net leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.

Simply answer a few questions — including how much you would like to invest — to start browsing their full list of available properties.

Smart withdrawal strategies

A long-standing retirement withdrawal strategy is the 4% rule, which involves withdrawing 4% of savings annually, adjusting for inflation each year. This approach, with the right management, is designed to make your nest egg last 30 years.

But the 4% rule isn’t the only withdrawal strategy available. One alternative is to use a dynamic, flexible approach that adjusts your spending each year based on needs, investment performance and life expectancy.

If you’re not sure what’s best for you and your retirement goals, it might be worth consulting with a financial advisor who can offer guidance based on your income and tax situation.

You could consider working with tax experts and professional advisors at Range. They offer white-glove financial services to high-income households.

Once your equity enters this ballpark, one of the biggest financial pain points can be asset under management (AUM) fees. These fees mean that portfolio managers take a percentage of the value, typically between 0.5% and 2%, of your managed assets — so their fees scale with your wealth.

By comparison, Range offers 0% AUM fees for advisory services and a flat-fee structure so that you can preserve more of your wealth. They also offer an all-in-one solution for everything from alternative asset management to taxes — all of which is informed by modern AI solutions, but backed by a team of certified financial professionals.

And the best part? You can book a complimentary demo to see if Range aligns with your needs as a high-net-worth investor.

Plan for health care costs

Retirees who responded to the Schroders survey reported spending an average of 15% of their monthly income on health care costs. It can pay to incorporate these expenditures into your long-term planning.

According to Fidelity Investments’ (3) latest health care cost report, a 65-year-old retiring in 2025 can expect to spend an average of $172,500 on health care and medical expenses in retirement — a 4% increase from the previous year.

The good news is, there are ways to make sure you’re better protected from paying high health care premiums as you enter retirement. For instance, long-term care insurance can offer coverage for the costs of in-home assistance, nursing homes or assisted living facilities.

Without proper planning, paying for long-term care could deplete your retirement fund. In many cases, the burden of paying for care often falls on family members – potentially straining their finances.

When considering long-term care insurance, GoldenCare offers different options based on your needs, including hybrid life or annuity with long-term care benefits, short-term care, extended care, home health care, assisted living, and traditional long-term care insurance. Sometimes, protecting yourself now can protect your family later.

Boost financial literacy and support

Around 25% of retired Schroders survey respondents say they’ve lost sleep worrying about finances, while 27% report spending an hour or more per day stressing over money.

Financial advisors can often be an untapped resource of financial literacy and support. Working with an accountant or a counsellor can help you create a sustainable income strategy in retirement that adjusts to changing economic needs.

With Advisor.com, you can find the right financial professional to help you fulfill your wealth goals — no matter your income or retirement objectives. It’s a free service that helps you find the right financial advisor for you by matching you with a small list of the best options for you to choose from.

Set up a free, no-obligation consultation with one of their pre-screened financial advisors today.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Schroders (1); Bureau of Labor Statistics (2); Fidelity (3)

This article originally appeared on Moneywise.com under the title: A whopping 62% of retired Americans have no clue how long their nest egg will last — and many blame climbing costs

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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