As more Americans hit retirement age, many aren’t fully considering how inflation and Social Security benefits might affect their financial well-being. A recent Prudential global survey found that an impressive 89% of affluent American adults feel confident about meeting their retirement needs. However, with rising costs for essentials like housing, food, and healthcare, only 55% of U.S. respondents have factored inflation into their retirement planning.
Caroline Feeney, Prudential’s global head of retirement and insurance, describes this as a “paradox of confidence.” She points out that being prepared in feeling and in reality are not the same things. People may think they’re ready and so they sometimes don’t act—delaying necessary savings and failing to address a retirement gap that they didn’t even know existed.
This distinction is particularly relevant as baby boomers reach turning 65 at a rate of over 11,200 each day until 2027, as noted by a January 2024 report from the Alliance for Lifetime Income. Notably, data shows that the consumer price index rose by 3% in September compared to the same month last year. Meanwhile, there’s an expected Social Security cost-of-living adjustment of 2.8% for 2026, meant to mitigate inflation impacts, adding roughly $56 a month to benefits starting in January.
However, a study from Goldman Sachs Asset Management found that spending for retirees has surpassed inflation in recent years. Moreover, the Prudential survey highlighted that 63% of respondents are worried that government programs like Social Security may not sustain their benefits during retirement.
The survey was conducted by Brunswick Group in August and included 4,200 adults aged 30 and older across the U.S., Brazil, Mexico, and Japan, all with more than $100,000 in investable assets.
Understanding Your Retirement Needs
Many people start off with a rather optimistic view about retirement, particularly according to certified financial planner Uzir Gomez, who specializes in clients from Gen Z and Millennials. He shares that they often believe they can simply cut back on expenses once they retire, thinking they will have more time to enjoy activities they like.
Interestingly, 54% of Americans believe their financial situation will improve as they age, yet the same percentage express concerns about depleting their savings during retirement. This data comes from a survey conducted in spring 2025 of 1,000 U.S. adults responsible for their household’s financial decisions.
Kamal Bhatia, CEO of Principal Asset Management, adds that while half of respondents feel they are on track, they seek tools for managing their retirement effectively. Meanwhile, those lacking confidence feel uncertain about achieving their goals.
As retirement anxiety peaks, especially among those nearing this transition, it’s crucial to have a clear plan. Working with a financial advisor can help in this respect. The Prudential survey indicates that 93% of participants who collaborated with an advisor felt secure about their essential retirement coverage, in contrast to 83% of those without one. This confidence gap only deepens regarding non-essential expenses, sitting at 86% versus 68%.
Using an online retirement calculator can also provide insights into whether your savings are on track. Resources from government agencies like the Social Security Administration, along with tools from financial companies, can assist in this process.
