Market changes amplify a quiet retirement risk
As markets drift and inflation stays stubbornly high, a new nationwide survey shines a light on a stubborn gap: Americans have focused on saving for retirement, but not on how they will spend it once they stop working. The findings arrive as households confront longer retirements and rising healthcare costs, creating a spend-down challenge that planners say goes beyond the usual budget worries.
What the survey found
In May 2026, Pivot Insights surveyed 2,400 adults aged 55 to 74 across urban and rural areas to gauge how people plan to distribute savings in retirement. The results point to a truth that many advisers have long warned about: accumulation isn’t the same as decumulation.
One line from the report has already become a shorthand among planners: "here's retirement challenge nobody" wants to name aloud. The survey shows the issue is not lack of savings alone, but the absence of a deliberate spending blueprint that aligns with life expectancy, health costs, and market cycles.
- Only about 28% report having a formal, written withdrawal plan detailing how they will take money from retirement accounts year by year.
- More than 60% rely on Social Security for at least half of their essential income once work ends.
- Approximately 29% have experimented with a bucket-style approach—segregating funds for near-term needs, mid-term growth, and long-term goals—but many find it hard to execute without constant adjustments.
- Estimated lifetime health-care costs and long-term care are a major concern: nearly 40% fear medical bills could exhaust savings earlier than expected.
- The median retirement nest egg reported by respondents is around $450,000, with a sizable share expecting a 25- to 30-year retirement after last paycheck.
Asked to rate their confidence in lasting through retirement, respondents averaged a cautious score, with many admitting they are uncomfortable with how volatile markets or unexpected health events could affect their plans. The takeaway: savings alone aren’t enough—retirement requires a detailed spend-down map.
Why this happens now
Several forces converge to create the spend-down dilemma. First, longevity has steadily risen, extending retirements well beyond typical life expectancies from a generation ago. Second, healthcare costs have remained a stubborn headwind, outpacing general inflation for many households. Finally, market volatility and low-for-long interest rates in recent years have made safe, predictable growth harder to pin down for retirees who must draw down principal.
Experts say the problem isn’t simply a lack of money; it’s a mismatch between how people save and how they spend. Dr. Priya Nair, chief economist at Pivot Insights, notes that many households treat retirement as a one-way switch from accumulation to consumption without a plan to navigate annual spending shocks, tax implications, and required minimum distributions.
"Here's retirement challenge nobody wants to admit is how you turn decades of saving into a sustainable, flexible drawdown that lasts as long as you do," Nair said.
What retirees can do now
Financial planners say there are practical steps households can take to close the gap between saving and spending. The goal is not to overspend early or underfund the long tail of retirement needs. Here’s a starter playbook:
- Create a formal withdrawal plan with yearly targets, escalation rules, and built‑in contingencies for health events or market downturns.
- Use a bucket approach: set aside near-term cash for 2–5 years of expenses, keep a growth sleeve for inflation protection, and reserve a longevity fund for 20+ years.
- Incorporate guaranteed income options where appropriate, such as annuities or longevity insurance, to stabilize spending even if markets wobble.
- Optimize Social Security claiming strategies to maximize lifetime benefits, considering inflation indexing and life expectancy in the household.
- Build a healthcare contingency plan that accounts for rising premiums, out-of-pocket costs, and potential long-term care needs.
- Review investment glide paths regularly and adjust for drawdown needs, tax efficiency, and changing risk tolerance.
- Keep a realistic budget that accounts for potential cost shocks, not just headline inflation figures.
Experts also emphasize the value of professional guidance. A structured plan created with a qualified fiduciary can help households translate savings into reliable income streams, while ensuring flexibility as circumstances change.
Market context and policy backdrop
The current market backdrop adds urgency to get decumulation right. With equities at cautious levels and bond yields volatile, retirees face a narrower range of safe, stable drawdown options. Tax policy changes and Social Security reforms under consideration in Congress also figure into long-term retirement planning, particularly for households near retirement age.
For many families, the story of retirement planning is unfolding in real time: a blend of careful saving, measured spending, and the willingness to adjust as life events, markets, and policy shift. The new survey underscores a broad truth for 2026: a strong savings habit must be paired with a disciplined spend-down strategy to avoid a surprising fade in financial security late in life.
Bottom line
The retirement challenge nobody talks about is not just saving enough. It’s turning that savings into a dependable, adaptable income plan that can sustain decades. The latest survey puts a spotlight on the gap between accumulation and decumulation—and the path forward requires a clear plan, a realistic budget, and the willingness to seek professional guidance when needed. As the data show, hoping for the best is no longer a viable retirement strategy.
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