I Asked a Wealth Manager Why People Struggle to Retire – 10 Key Reasons
Retirement is supposed to be the reward at the end of a long working life. A time to exhale, slow down, and finally enjoy what you spent decades building. So why does it feel like that finish line keeps moving further away for so many people?
The numbers tell a sobering story. Surveys, research institutions, and financial industry reports from 2024 and 2025 are all saying essentially the same thing: millions of Americans are heading toward their later years financially underprepared. I sat down, figuratively speaking, with the kinds of questions a wealth manager fields every day, and the answers are both fascinating and a little alarming. Let’s dive in.
1. Most People Simply Haven’t Saved Enough – And They Know It
Here’s the thing that surprises almost everyone: most people already know they’re behind. They just don’t know what to do about it. Retiring comfortably is a common goal for many working Americans, but a majority say they’re behind on their retirement savings – about three in five American workers say their retirement savings are behind where they should be.
According to Northwestern Mutual’s 2025 Planning and Progress Study, the amount Americans think they need to retire comfortably comes in at $1.26 million. That sounds like a clear target, right? Among Americans who actually have retirement savings, one in four say they have just one year or less of their current annual income put aside for retirement. That gap between expectation and reality is staggering.
When retirees were asked whether they felt they had saved too little over their lives, more than half said yes. The most common reasons cited were that they lived day to day and simply didn’t plan ahead. It is not a secret problem. It is a widely felt, deeply personal one that too many people avoid confronting until it is too late.
2. The Paycheck-to-Paycheck Trap Makes Saving Almost Impossible
Let’s be real. If you’re barely covering this month’s bills, thinking about retirement twenty years from now feels almost offensive. More than half of Americans are living paycheck to paycheck and are frequently having to decide between focusing on daily survival and planning for their futures. That choice, survival versus future, is where most people quietly lose the retirement race.
Many workers are living paycheck to paycheck, with one third saying they rarely or never have money left over at the end of the month. That’s not a budgeting problem. That’s a structural problem affecting tens of millions of households. Many retirees who have nothing saved blame their low income during working years, and among those who admit to having nothing set aside, roughly three in five say they mostly lived paycheck to paycheck before retiring.
3. The Death of the Pension Changed Everything
A generation or two ago, you worked for thirty years, you got a pension, and you retired on a predictable monthly income. Simple. Dependable. That world is largely gone now, and the shift has been catastrophic for many workers. The decline in financial security in retirement is partly attributed to the decline of defined benefit pensions and programs.
The workplace retirement system shifted from a pension-heavy setup to a 401(k)-type system right as many baby boomers were in their peak earning years, meaning they didn’t fully benefit from the pensions their parents or grandparents had, nor from the newer savings-based system. It was the worst of both worlds for an entire generation. Estimates suggest a typical pension may carry a 49% cost advantage over a 401(k)-style account when it comes to delivering retirement income, thanks to better investment pooling, lower fees, and the guarantee of not outliving one’s savings.
More than three-quarters of Americans have a favorable view of pensions, and 77% agree that the disappearance of pensions makes it harder to achieve the American Dream. Honestly, it is hard to argue with that sentiment when you look at the data.
4. No Access to Workplace Retirement Plans
Not everyone gets offered a 401(k) at work. That sounds like a minor inconvenience, but the ripple effects are enormous. A nationally representative survey of workers who don’t have access to employer-sponsored retirement plans shows that they experience everyday financial constraints that make it difficult for them to accumulate assets. Without the structure of automatic contributions and employer matches, saving becomes an act of pure willpower. Most people don’t have that kind of willpower, and frankly, they shouldn’t have to.
Workers who lack access to employment-based retirement savings plans are often especially vulnerable in retirement, when they must rely heavily on income from Social Security. That dependency on Social Security is a vulnerability that compounds over time. In 1989, the wealthiest 10% of Americans held seven times more wealth than the bottom half of the population. By 2024, that gap had widened to eleven times more wealth. The lack of workplace savings access is one of the quiet engines driving that inequality.
5. Healthcare Costs Are Draining Retirement Funds
I think this is the one that shocks people the most when a wealth manager lays it out on paper. Healthcare in retirement is expensive. Brutally so. According to Fidelity’s 2025 Retiree Health Care Cost Estimate, a 65-year-old retiring in 2025 can expect to spend an average of $172,500 in health care and medical expenses throughout retirement – a more than 4% increase over 2024.
A healthy 65-year-old woman could face $313,000 in total health care expenses over her retirement, compared with about $275,000 for a man, according to the 2025 Milliman Retiree Health Cost Index. And those figures don’t even account for long-term care costs. Medical care prices have risen faster than overall consumer prices for more than two decades – from 2000 to June 2024, medical care prices increased by more than 120%, compared with an 86% rise in all goods and services.
Despite this, there continues to be a significant disconnect between actual projected costs and what Americans believe they will spend on health expenses in retirement. In fact, the average American estimates health costs will be about $75,000, which is less than half of what Fidelity calculates. That kind of underestimation can completely unravel even a solid retirement plan.
6. People Are Retiring Earlier Than They Planned – Not by Choice
The idea that people retire early because they are financially free is a pleasant myth. The reality is usually very different. Almost six in ten retirees retired sooner than planned, and among them, nearly half did so for personal health-related reasons, and about four in ten due to employment-related issues. Only one in five retired early because they were financially able.
In 2025, four in ten retirees said they left the workforce earlier than planned, according to the Employee Benefit Research Institute’s Retirement Confidence Survey. That share has hovered around 40 to 50 percent for the past two decades, with common reasons including health problems and layoffs. Being forced out of the workforce years before you planned throws every savings projection into chaos.
Fewer than one in four retirees are very confident they will be able to maintain a comfortable lifestyle throughout their retirement, according to the Transamerica Center for Retirement Studies’ 2024 report. That figure is sobering, particularly when you consider that these are people who already made it to retirement.
7. The Looming Social Security Crisis Is Making Everything Worse
Social Security was never meant to be a complete retirement solution. It was designed as a floor, not a ceiling. Yet for tens of millions of Americans, it has become the entire structure. More than half of Americans reaching retirement between 2024 and 2030 will have to rely primarily on Social Security as their primary source of income, and the average expected Social Security benefit for peak boomers is only about $22,000 annually. Try building a life on that.
In 2024, Social Security Trustees delivered an update projecting that the main trust fund for retirement benefits is projected to run dry by 2033, a full year earlier than previous forecasts, setting the country on a collision course with a grim deadline less than a decade away. Asked about that projected depletion, the majority of retired adults say they are concerned about receiving their promised benefits, a number that has grown compared to the previous year.
When it comes to inflation, nearly three quarters of respondents in the 2024 National Institute on Retirement Security survey said recent inflation has made them more concerned about retirement. The combination of Social Security uncertainty and persistent inflation is a genuinely frightening one-two punch for anyone trying to plan their later years.
8. A Staggering Lack of Formal Planning
You wouldn’t build a house without blueprints. Yet most people try to build their retirement exactly that way. Nearly seven in ten Americans between ages 50 and 74 don’t have a formal retirement plan, while four in five lack even the basic knowledge of how to be financially secure in retirement. That statistic should stop you cold. These are people who are, by any measure, close to retirement age.
Only 27% of Americans feel financially prepared for retirement, down from 43% just five years ago in 2020. Confidence in retirement readiness has not just stalled – it has collapsed. Over the past five years, Americans’ confidence in their ability to financially support the things they want to do in retirement has dropped by 13 percentage points since 2020.
About two thirds of retirees said they wish they had better understood retirement savings when they were working, with more than half saying they waited too long to start saving. The regret is real. The planning gap is real. The solution – starting earlier and actually building a structured plan – is also real, but it requires urgency that most people don’t feel until it is far too late.
9. The Gender Gap in Retirement Is Still Very Much Real
It’s 2026, and women are still systematically disadvantaged when it comes to retirement security. The numbers are not subtle. Peak boomer women are likely to face much greater financial struggles than men, with a gender disparity in median retirement savings of $269,000 for men compared to $185,000 for women. Additionally, the median Social Security benefit for women is projected to be only $21,400, compared to $28,400 for men.
Retired women are 38% more likely than men to say they have nothing saved for retirement. Decades of lower wages, career breaks for caregiving, and less access to higher-paying roles all compound over a working lifetime. The situation is especially stark for retired women, who are 33% more likely than men to say they don’t have enough money saved for a comfortable retirement, and about 28% of retired women have nothing saved, compared to 20% of men. These are not small differences.
10. The Wealth Gap Is Widening – and Longevity Is at Stake
Perhaps the most devastating fact of all is this: how much money you have doesn’t just determine how comfortably you retire. It determines how long you live. A report from the National Council on Aging and LeadingAge LTSS Center at UMass Boston reveals that older adults with the fewest financial resources die, on average, nine years earlier than those with the greatest wealth – a finding drawn from nationally representative Health and Retirement Study data.
Research discovered that 80% of households with older adults – or 47 million households – are financially struggling today or are at risk of falling into economic insecurity as they age. That is not a small sliver of the population struggling on the margins. That is the overwhelming majority. Longer lives and lower savings are fueling a retirement security crisis for millions of Americans, worsened by inflation, rising health care costs, and the fact that someone turning age 65 today has nearly a 70% chance of needing some type of long-term care services in their lifetime.
When asked whether the nation faces a retirement crisis, 79% of Americans agree there indeed is one – up from 67% in 2020. That kind of consensus across the general public is rare. People know something is wrong. The awareness is there. What’s missing, for too many, is the runway and the resources to actually fix it.
What This All Means for You
The portrait that emerges from all of this research is not one of personal failure. It is a systemic picture – one shaped by disappearing pensions, rising costs, stagnant wages, and a healthcare system that can consume a retirement nest egg with breathtaking speed. No single person caused this, and no single person can ignore it either.
The wealth managers who deal with these conversations every day will tell you the same thing: the biggest mistake isn’t making a wrong investment. It’s waiting. Starting late, planning late, and hoping things will somehow work out. Someone who postpones saving until age 50 and wants to reach a $1.26 million retirement goal would need to invest nearly $4,000 every single month, assuming a 7% rate of return. The math is merciless.
The retirement gap is real, it is growing, and it is personal. The encouraging thing? Unlike many large problems, this one is still solvable with the right awareness, the right tools, and above all, the decision to act before inertia makes the decision for you. What would you have guessed – that the gap was this wide?
