Financial Uncertainty Pushes Americans to Rethink Retirement Plans

As retirement approaches for millions of Americans, the path forward appears increasingly uncertain, with many expressing concerns about how they will generate income in their post-work years.

According to the 2024 Schroders US Retirement Survey, the results of which were released Thursday, nonretired Americans expect to draw on a range of income sources beyond Social Security when they do retire, with 60% planning to rely on cash savings and 48% counting on their workplace 401(k), 403(b) or 457 plan. Other top sources include a spouse’s retirement plan (37%), investment income (36%) and a spouse’s pension plan (27%).

Despite 51% of nonretired Americans expressing concern about outliving their retirement savings, many plan to file for Social Security earlier than full retirement age. The most popular ages cited by respondents at which they plan to begin claiming their benefits were 65 (23%) and 62 (12%). In total, 43% reported intending to claim before reaching age 67—the full retirement age for those born after 1960—while only 10% plan to wait until age 70, which would allow them to receive the maximum monthly benefit.

Furthermore, the Schroders survey revealed that 53% of retirees simply withdraw money when needed, with only a minority employing more structured approaches. The most common sources for capital include dividend-producing stocks or mutual funds (23%), systematic withdrawals from retirement accounts (22%) and certificates of deposit (17%).

Concerns about income generation extend beyond retirees, with 88% of nonretired Americans expressing at least slight unease about not knowing how to best generate income in retirement. Additionally, nonretirees expect to need an average of $4,947 per month to live comfortably—significantly more than the average of $4,258 per month that current retirees report receiving.

Delaying Retirement

Amid this uncertainty, many workers appear to be delaying their retirement plans. The 2024 Global Benefits Attitudes Survey from WTW found that financial concerns are leading older Americans to work longer or phase into retirement gradually. According to the survey results released Wednesday, 34% of workers aged 50 and older have either started reducing their work hours or responsibilities as they near retirement (15%) or intend to do so (19%).

This phased approach to retirement allows older workers to maintain a level of financial security while transitioning into retirement over a longer period, according to WTW. For example, employees who begin phasing into retirement at age 59 expect to continue working for an additional nine years on average. Most of these individuals have opted to reduce their work hours (61%) or take on fewer job responsibilities (41%), while others are exploring changes in their roles or work environments, such as shifting to more remote work.

When asked about the key drivers behind their retirement decisions, financial security emerged as a major factor for 76% of respondents, followed by health concerns (50%) and the desire for more time with family, leisure and travel (45%).

The survey found a larger percentage of people looking to their employer-sponsored retirement plan to meet their needs, with 72% identifying it as their primary savings tool for retirement. Moreover, 55% of employees consider their retirement plan a significant factor in remaining with their current employer, a rise from 48% in 2017.

The Schroders 2024 US Retirement Survey was conducted among 2,000 U.S. investors ages 28 through 79 from March through April, while the WTW Global Benefits Attitudes Survey polled 10,000 U.S. employees working in medium and large private companies across various industries from January through March.