A growing number of Americans are feeling optimistic about their retirement prospects, but this confidence is mixed with anxiety. The 2025 Retirement Confidence Survey reveals that while 67% of workers feel confident in their ability to secure a comfortable retirement, they still worry that they may not be able to save as much as they want to.
Causes for Concern
This apprehension is driven by many factors, including inflation, rising housing costs, and a volatile stock market. The biggest causes for concern are the following:
1. The rising cost of living. Amid today’s economic pressures, the survey reveals that 81% of American workers worry that increasing living expenses are eroding their ability to save as much as they’d like. These concerns have intensified in recent years due to high inflation during and following the COVID-19 pandemic. Though the weakening of the dollar has slowed considerably over the past couple of years, concern still lingers among workers.
2. Increasing healthcare expenses. Premiums, deductibles, and other medical costs have become a growing challenge for both workers and retirees. Approximately 56% of workers report that rising healthcare costs are significantly hindering their ability to save for retirement, while 38% of retirees indicate that their out-of-pocket healthcare and dental expenses in retirement have surpassed expectations. These escalating costs force many people to divert funds that could otherwise be allocated to long-term savings, creating a gap between ideal retirement funding and real-life expenditures. The American Medical Association confirms that general healthcare costs have been increasing more than expected. Americans are having to rethink and adjust their financial priorities to ensure they can cover essential health needs without derailing their retirement plans.
3. Potential changes to Social Security and Medicare. Uncertainty about potential changes to government services is a significant concern for many Americans preparing for retirement. The survey shows that 79% of workers are at least somewhat worried about possible modifications to Social Security and Medicare, with many fearing a reduction in benefits. These programs have long served as a financial safety net for retirees, and growing skepticism of their stability is prompting individuals to seek alternative ways to safeguard their retirement security.
The Growing Appeal of Guaranteed Income Options
The persistent worry about rising expenses has led many workers to consider alternative strategies to safeguard their savings. Around 30% of workers now believe that the most valuable improvement to their retirement plan is the addition of a guaranteed lifetime income component.
Historically, annuities have been less popular than other retirement options. In particular, fixed annuities were often viewed less favorably than investment options like stock, which offered greater growth potential. However, according to LIMRA, the sale of annuities remains strong, driven by economic concerns. In April, Bryan Hodgens, Senior Vice President and Head of Research at LIMRA, said, “For the sixth consecutive quarter, total annuity sales topped $100 billion, demonstrating that elevated interest in principal protection and guaranteed income continues. Our latest Consumer Sentiment Survey shows Americans’ concern about the economy has risen sharply since January. This growing economic anxiety drove March sales results to be the second highest in history.”
Of course, it is worth mentioning that while annuity rates have increased substantially over the past few years, they are expected to decline toward the end of 2025 and into 2026 due to decreasing interest rates. For retirees or those who will retire soon, now is a good time to take advantage of the higher annuity rates.
You Can Help
The 2025 Retirement Confidence Survey reveals that Americans want help planning for retirement. While 40% currently work with a financial advisor, another 40% say they don’t know where to turn for good planning advice. Continue initiating conversations about retirement planning and the important role annuities can play in supplementing other retirement income sources. You may find that more people nearing retirement (and new retirees) are not only open to the idea of securing a source of guaranteed lifetime income that will remain unaffected by market volatility, they are actively seeking it out.
