Financial planners say their clients are financially ready but may be less prepared for the emotional and lifestyle adjustments of retirement.
The challenge of saving enough for a long retirement and increasing healthcare costs were also major risks cited by 167 financial planners who participated in the 2025 Trends in Retirement Planning survey. The study, conducted by Financial Planning Association with support from Finance of America, looked at the evolving challenges and priorities shaping retirement.
“Retirement isn’t just about number-crunching; it’s a significant emotional transition that many clients simply aren’t emotionally prepared for,” FPA President Paul Brahim, CFP, CEPA, said in a news release. “As more Americans near retirement, it’s imperative that financial planners do more than just manage money. They also need to help clients deal with the emotional aspect of this new life phase.”
Financial planners’ chief concerns are the emotional and lifestyle adjustments of retirement, healthcare costs and saving enough for a long retirement.
“Seniors currently hold over $14 trillion in home equity,” noted Steve Resch, vice president of retirement strategies at Finance of America. “Incorporating some of this equity into a comprehensive retirement plan can help address various concerns retirees and pre-retirees faceThese can include the risk of outliving their savings and maintaining their desired lifestyle, the top two concerns identified by financial planners.”
Over 50% of planners say their clients are financially prepared for retirement, but only 11% think they are emotionally prepared. Almost 60% say clients are only moderately prepared emotionally, and 5% say clients are not at all prepared. Client fears include trouble adapting to life without work, losing their sense of identity, or burdening their loved ones.
Healthcare Costs Are a Major Concern
Retirees’ chief concern is healthcare expenses, which surpasses inflation and market fluctuations. Still, many retirees underestimate their healthcare needs, especially in their later years when health problems can deplete savings. Responding to medical cost inflation, planners are focusing more on incorporating healthcare savings options, including health savings accounts, long-term care plans, and strategies for optimizing Medicare into retirement plans.
Longevity Risk
Among survey respondents, 47% report their clients’ biggest fear is running out of money in retirement, and 22% say it’s the second biggest fear. Not having a good lifestyle is reported by over 55% of planners as a top client fear. Other significant fears include the expense of long-term care and being financially reliant on family members.
Individualized Social Security Plans Are a Necessity
Most clients rely on Social Security for a large portion of their income, although planners warn that that this may not be sufficient for a long retirement. While almost 50% recommend waiting until age 70 to claim benefits, 31% suggest claiming benefits at the “full retirement age” (66-67), and almost 18% say they advise on case-by-case basis. Significant factors in deciding when to claim Social Security include health, life expectancy, spousal benefits, and legacy goals.
“This report emphasizes the importance of financial planners dealing with the financial and emotional toll of retirement,” Brahim said. “Planners need to go beyond the numbers to address the emotional and psychological preparedness clients require in retirement.”
