Recent retirees battle with unexpected financial challenges, regret retirement savings strategies

Recent retirees battle with unexpected financial challenges, regret retirement savings strategies

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The dream of life in retirement likely looks the same for many working Americans: stress-free days, the freedom to set their own schedule and plenty of time for travel. However, some who retired in the last five years are facing an uncomfortable reality check in today's tumultuous economy.

According to a new survey from the Nationwide Retirement Institute, just two in five (40%) investors who have retired in the last five years say they're on track with their original budget and decumulation plan, with another 21% saying they've had to be more conservative with spending than planned since retiring - meaning less financial freedom to enjoy retirement the way they envisioned.

The reason for the shift? Market volatility is proving to be especially problematic for recent retirees compared to their longer-retired peers. Nationwide's survey found half (50%) of those retired in the last five years made changes to their retirement portfolio due to recent market turbulence, compared to just one-third (33%) of longer-term retirees. Additionally, 47% said market volatility has impacted the way they approach managing their portfolio and withdrawing or spending down their retirement savings income, compared to 35% of those who have been retired for more than five years.

As a result, more than half (55%) of recent retirees say they have regrets about how they saved for retirement, with 28% wishing they began saving earlier and 13% wishing they contributed more to their retirement savings and investments each year.

"Retirement planning isn't just about setting a number and aiming to achieve it; it's about building a strategy that anticipates life's changes and regularly revisiting that plan as life happens," said Kevin Jestice, president of Nationwide Retirement Solutions. "However, it's not too late for retirees to take steps toward greater financial confidence. Review your budget, explore additional income opportunities and partner with a financial advisor to align your investments with your goals."

Financial advisors understand retirees' concerns and can help tackle key issues, Jestice said. In fact, according to Nationwide's survey, nearly all (97%) advisors agree that rising living costs are making it harder to retire comfortably. As a result, they are shifting their focus for their clients to address the increased burden from healthcare costs and other economic pressures, as well as identifying guaranteed income solutions.

"Advisors play an essential role during the first few years of retirement, helping retirees navigate new financial realities, manage spending and adjust strategies as life unfolds," Jestice said. "By openly communicating your concerns and goals with an advisor, you can feel more confident your plan will evolve with your needs regardless of changing market environments."

Jestice shared the following topics recent retirees may want to revisit with their financial advisor:

1. Contributions: Talk with your advisor about tax-efficient ways to boost savings, like Roth conversions. If you're still working part-time or have earned income, consider catch-up contributions to IRAs or 401(k)s.

2. Withdrawal and Spending Plan: Create or revisit your withdrawal strategy that balances income needs with longevity risk. Bucket expenses into essential versus discretionary spending to prioritize necessities.

3. Investments: Ask about strategies to hedge inflation, like annuities.

4. Healthcare and Long-Term Care: Work with your advisor on estimating Medicare premiums, supplemental insurance and out-of-pocket costs. Explore long-term care insurance if possible.

"This data should also serve as a wakeup call for younger savers to review their savings habits and strategies before they reach retirement," Jestice said. "The sooner you address potential challenges to your financial security, the more options you have."

NFM-25302AO
01/2026