Generally speaking, retirement sentiment among those currently in the planning stage is high. Two-thirds of pre-retirees express confidence in their plans as it stands, but the metric took a notable dip of 7 percentage points when compared to 2024, according to new survey results from Fidelity Investments.
The source of the decline is likely not surprising for after the economic data of the past few years. Fidelity attributes it to “the lingering impact of inflation and the cost-of-living.” The company goes on to explain that “although more than 70% of recent retirees say retirement is going as planned, many have been caught off guard around rising costs, particularly health care expenses.”
The survey has been conducted annually since 2019. This year, the focus was expanded to include those planning retirement as well as those who recently entered it in order to “compare expectations against reality.”
“At the forefront are Gen X-ers, who notably hold the most negative retirement outlook among all generations,” the survey found. “In fact, just over half (53%) of Gen X-ers are confident they will be able to retire on their own terms, and one-third say they may continue to work in retirement to supplement their income.”
Rita Assaf, vice president of retirement offerings at Fidelity, said that it’s “encouraging” to hear that many retirees say their planning is paying off. But the sentiment from pre-retirees should not be overlooked as they juggle multiple priorities, including care for aging parents and funding their children’s college education.
“Notably, the current generation of retirees could be the last to use predictable sources of income such as pensions as the primary way they fund retirement,” Assaf said. “The shift toward relying on retirement savings heightens the importance of grounding yourself in a financial plan as early as you can.”
Still, most recent retirees say they’re satisfied with how their planning is going. Nearly three in four (72%) say their retirement is “going as planned.” Similar numbers say they’ve saved and planned for a comfortable retirement (70%) and that retirement is more enjoyable than they expected (69%).
Some of this general optimism likely comes from the employment of “traditional” sources of retirement income, including pensions and Social Security. This makes budgeting easier and more straightforward, but 70% also explain that increases in the cost of living have eaten into their savings.
“One of the biggest areas where they have been caught off guard is health care — one of the largest expenses in retirement,” Fidelity explained. “More than half (57%) of those who say they did not plan for health care costs not surprisingly also say health care costs are higher than they anticipated, and 4-in-10 (43%) feel Medicare covers less than they thought.”
The survey consisted of 2,001 adults with at least one investment account, Fidelity said. The generations are defined as ages 60 to 78 for baby boomers, ages 44 to 59 for Gen X, ages 28-43 for millennials and ages 18 to 27 for Gen Z. The survey was conducted from Dec. 10-17, 2024, by Big Village, which is not affiliated with Fidelity Investments.
