Rethink retirement by putting uncertainty in perspective when planning

Think retiring at age 65 probably isn’t in your future? You’re not alone. A recent January 2024 Advisory Authority survey, powered by Nationwide Retirement Institute®, found that most people ages 55-65 believe the typical retirement age doesn’t apply to them. This sentiment is echoed by two-thirds of pre-retiree investors (67%) who expect to face more challenges in retirement than their parents or grandparents.

More Americans are turning age 65 this year than ever before. Economic and financial market uncertainty have prompted many in this demographic to rethink how they envision retirement.

As many people approach traditional retirement age, they’re taking a practical approach to their golden years. Instead of dreaming about travel, spending time with family and friends or pursuing hobbies, they’re prioritizing lifelong financial security, paying for care or assistance if they need it, and ensuring they have the financial means to maintain the lifestyle they want in retirement.

Whether you’re optimistic about retirement or feeling apprehensive like our survey respondents, Nationwide is here to help you make sense of the uncertainty and gain confidence to make progress toward your future goals.

Navigating economic uncertainty with retirement planning

If you’re like most folks approaching retirement, the increasing costs of living due to inflation and rising interest rates are weighing heavily on your mind. With good reason: These economic challenges are more than numbers on a page. They put a strain on household spending and make it more challenging to manage day-to-day expenses and save for long-term goals like retirement.

High mortgage and credit card debt are also common obstacles when it comes to saving for retirement, especially among Baby Boomers and Gen-Xers. In response, many people who are approaching retirement are opting to live more frugally—cutting back on unnecessary spending such as taking vacations, buying jewelry and going on shopping sprees—to meet these hefty expenses, pay down debt, and free up funds to put toward their retirement savings.

For many, that means re-evaluating “needs” vs. “wants.” You may find yourself making similar lifestyle shifts as you approach retirement. That’s going to require some discipline, but maintaining a long-term perspective and focusing on your goals can help you stay on track.

Social Security and retirement

The uncertain future of Social Security is another factor that’s causing some to rethink their retirement plans. The program was once considered a reliable source of retirement income for older generations. Today, however, many people don’t intend to rely on it as much as their parents and grandparents did.

While there’s no guarantee Social Security will provide the same level of benefits as in the past, it isn’t likely to go away anytime soon. Keep in mind that Social Security is just one aspect of your retirement picture; you’ll also need to consider the role your personal savings and investments will play.

Helping you secure your dream retirement

Markets and economies are cyclical, which is good news because it means the current uncertainties are only temporary. Nonetheless, there are some things you can do to help ride out the near-term turbulence:

Find a balance between meeting your current financial needs and saving for the future. You may have to make some tough choices and prioritize long-term financial goals over short-term gratification, but your future self will thank you for it.

Stay resilient. Market ups and downs may make you anxious, but history shows that better times eventually follow downturns. Of course, past performance is not an indicator of future results. Generally speaking: if you stay the course and maintain a long-term view of your investments, it can pay off when it comes to reaching your retirement goals.

Connect with a financial professional. A financial professional can help develop a financial plan that fits your individual retirement goals. They can provide guidance on complex concerns such as tax planning, when to file for Social Security, accumulating savings and converting it into steady income when you need it.

No matter what kind of retirement you're envisioning, a financial professional can help you feel more confident about reaching your future goals.

Methodology: The research was conducted online within the U.S. by The Harris Poll on behalf of Nationwide from January 8-23, 2024, among 518 advisors and financial professionals and 2,346 investors ages 18+ with investable assets (IA) of $10K+. Advisors and financial professionals included 257 RIAs, 178 broker-dealers, 130 wirehouse and 42 other financial professionals. Among the investors, there were 601 Mass Affluent (IA of $100K-$499K), 518 Emerging High Net Worth (IA of $500K-$999K), 410 High Net Worth (IA of $1M-$4.99M) and 217 Ultra High Net Worth (IA of $5M+), as well as 600 investors with $10K to less than $100K investable assets (“Less affluent”). Investors included a subset of 391 “pre-retirees” age 55-65 who are not retired.

Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.