Rising costs, concerns about Social Security, and geopolitical turmoil have dampened retirees' hopes in 2026. And it looks like the next year won't be better.
The Employee Benefit Research Institute's (EBRI) Retirement Confidence Survey showed that both workers and retirees are growing pessimistic, with sentiment down sharply compared to 2025. The silver lining for financial advisors, though, is it's a great time to showcase their value.
Financial health in peril
The survey of 2,544 Americans 25 and older, including retirees and workers, showed both groups reporting declining confidence in their financial well-being in retirement. Among workers, confidence fell 6 percentage points to 67% from 2025, while among retirees, it fell 5 percentage points to 73%.
Craig Copeland, director of wealth benefits research at EBRI, said survey respondents cited inflation, debt, health care, housing costs and policy changes as major concerns at the time they were surveyed. Since then, geopolitical issues in the Gulf states have likely added to their worries.
"If this persists, I would expect another significant decline [in confidence] over the next year," he said.
EBRI also reported that 65% of workers said debt was an issue, with one-quarter calling it a major problem. The report also noted that half of workers have credit card debt, and 1 in 3 owes more than $25,000 in nonmortgage debt.
"We see debt increasing, [making] it harder or impossible for people to save," said Copeland. "If they can't save, they can't be confident about their future."
In addition to debt eating into financial preparedness, EBRI reported that fewer than 2 out of 5 workers and half of retiree respondents said their financial well-being was at least very good.
Social insecurity?
A long-held belief is that most Americans retire at 65 — long the traditional age to enroll in Medicare and once the full retirement age for Social Security — but it's actually 62, according to EBRI. Kevin Jestice, president of financial retirement solutions at Nationwide Financial, said most early retirements are driven by uncontrollable factors.
"Think health, disability, restructuring or layoffs," he said.
Yet reliance on entitlements like Social Security, Medicare and Medicaid in those golden years has wavered. According to EBRI, roughly half of workers and 6 in 10 retirees believe Social Security and Medicare will be of equal or lesser value in the future.
Jestice noted that over a third of Generation Z and millennials don't think they'll receive any Social Security benefits.
Meanwhile, housing and health care costs, which are often large parts of the retirement picture, have only continued to rise. Seven in 10 workers and half of retirees had concerns about how rising housing costs would affect their retirements, while nearly 6 in 10 workers reported that health care costs dampened their ability to save for retirement, and 2 in 5 retirees said health care-related expenses were higher than expected.
Long-term planning and active listening
Given these factors, a panicked client call here or there is understandable. One way to ease panic, however, is to be prepared to offer solutions alongside a sympathetic ear.
Armando Ureña, an advisor in Snowden Lane Partners' Coral Gables, Florida, office, stresses the need for a viable plan to help soothe potentially frazzled nerves.
"To the extent that there's a plan, anxiety or concerns about the financial future drop significantly," he said. Even if markets rise and fall and moods mirror it, "ultimately it's about whether or not there's some sort of plan."
Truly listening to clients should also be a top priority for advisors.
"Sit with the client, understand where their question is coming from," said Judd Meinhart, director of financial planning, wealth manager and principal of Modera Wealth Management in Winston-Salem, North Carolina.
Meinhart finds clients' questions often boil down to, "Will I be OK?"
"The more you can tune into that with clients, the more they're going to be at a space where they'll listen and respond to what it is you have to say," he said. "We can position ourselves as experts in the room, but the message is lost if it doesn't fall on receptive ears from the clients."
