7 Biggest Financial Concerns for Retirees in 2025 and How to Fix Them

Every week, I hear from retirees and near-retirees who share some version of the same anxiety: “I did everything right, and I’m still worried about running out of money.” After 15 years working in consumer finance—including my time as a senior analyst at the Consumer Financial Protection Bureau—I can tell you that fear is neither irrational nor uncommon. In fact, it’s backed by hard data.

A 2025 survey from the Employee Benefit Research Institute found that only 48% of retirees feel “very confident” they’ll have enough money to live comfortably throughout retirement, down from 55% just two years ago. Meanwhile, inflation, volatile markets, rising healthcare costs, and a shifting Social Security landscape have created a perfect storm of financial uncertainty for Americans over 50.

Below, I’m breaking down the seven biggest financial concerns for retirees right now—and, more importantly, what you can actually do about each one. These aren’t vague platitudes. They’re specific, actionable strategies drawn from real regulatory experience and current economic conditions.

1. Inflation Is Quietly Draining Retirement Savings

If there’s one concern I hear more than any other, it’s this: the purchasing power of a fixed income is shrinking. The Bureau of Labor Statistics reported that cumulative inflation from January 2020 through mid-2025 exceeded 22%. That means every $1,000 in monthly retirement income now buys what roughly $780 would have bought five years ago.

What makes inflation so devastating for retirees is that it compounds silently. You don’t feel it in a single grocery trip—you feel it over 18 months when you realize you’re pulling $400 more per month from your savings than you planned. As I’ve written before, this is the silent killer for retirement portfolios in 2026 and beyond.

What you can do about it

• Revisit your budget every six months, not annually. Track actual spending against projections and adjust withdrawal rates accordingly.
• Allocate a portion of your portfolio—typically 15-25%—to inflation-protected assets like TIPS (Treasury Inflation-Protected Securities) or I Bonds, which currently yield above 3.5%.
• Consider delaying Social Security if you haven’t claimed yet. Each year you wait past full retirement age (up to 70) increases your benefit by 8%, and that benefit is indexed to inflation via COLA adjustments.

For a deeper dive into specific portfolio strategies, I recommend our comprehensive guide on 6 ways to protect retirement savings from inflation in 2026.

2. The 2027 Social Security COLA Uncertainty

Right now, the projected 2027 Social Security cost-of-living adjustment (COLA) sits at approximately 2.4%, though some recent estimates have pushed it as high as 3.6% depending on summer CPI-W readings. For context, the 2025 COLA was 2.5%, and the 2024 COLA was 3.2%—both significantly lower than 2023’s historic 8.7% bump.

“The COLA is designed to help retirees keep pace with inflation, but it consistently falls short because the CPI-W index it’s based on doesn’t accurately reflect how seniors actually spend money—particularly on healthcare and housing.”

I’ve studied this gap for years, and the math is stark. According to the Social Security Administration, the average retired worker receives approximately $1,976 per month as of early 2025. A 2.4% COLA would add roughly $47 per month—barely enough to cover a single week of increased grocery costs for many households.

What you can do about it

• Stop thinking of COLA as a raise. It’s a partial inflation offset at best. Build your retirement budget assuming your real purchasing power from Social Security will decline 0.5-1% annually.
• If you’re still working and over 50, maximize catch-up contributions to your 401(k) or IRA. For 2025, catch-up limits are $7,500 for 401(k)s and $1,000 for IRAs (with a new $11,250 super catch-up for those aged 60-63).
• Explore our detailed analysis of what the 2027 Social Security COLA projection really means for your monthly check.

3. Healthcare Costs Are the Biggest Wildcard

Fidelity’s 2025 Retiree Health Care Cost Estimate projects that an average 65-year-old couple retiring today will need approximately $351,000 to cover healthcare expenses throughout retirement—and that figure doesn’t include long-term care. When I was at the CFPB, healthcare expenses were consistently the number-one budget item that derailed otherwise sound retirement plans.

Medicare Part B premiums alone rose to $185 per month in 2025, up from $174.70 in 2024. Add in Part D prescription drug costs, Medigap or Medicare Advantage premiums, dental work (which Original Medicare doesn’t cover), and out-of-pocket maximums, and you’re looking at $6,000-$12,000 annually depending on your health status.

What you can do about it

• Review your Medicare coverage during Open Enrollment every year (October 15–December 7). Don’t assume last year’s plan is still optimal. The official Medicare website has a plan comparison tool that takes 15 minutes and can save hundreds annually.
• If you’re eligible, fund a Health Savings Account (HSA) before retiring. HSA funds roll over indefinitely, grow tax-free, and can be withdrawn tax-free for qualified medical expenses at any age.
• Look into Medicare Savings Programs if your income is limited. Many retirees who qualify don’t apply—the Social Security Administration estimates that over 2 million eligible seniors aren’t enrolled.

4. Running Out of Money Before Running Out of Life

Longevity risk is the financial planning term for outliving your money, and it’s a growing concern as life expectancy at age 65 continues to rise. According to the Society of Actuaries, a healthy 65-year-old woman today has a nearly 50% chance of living past 87 and a 25% chance of reaching 93.

That means your retirement savings may need to last 25-30 years—a planning horizon that most people underestimate. A recent Allianz Life survey found that 63% of Americans over 60 are more afraid of running out of money than they are of dying.

“What I see most often is retirees who planned for a 20-year retirement discovering at age 80 that they might need their money to last another 15 years. The math changes dramatically when you extend the timeline.”

What you can do about it

• Use the “4% rule” as a starting point, but adjust downward if you’re retiring before 65 or have a family history of longevity. Many financial planners now recommend 3.3-3.5% for early retirees.
• Consider a partial annuity strategy. Allocating 20-30% of your savings to a single-premium immediate annuity (SPIA) can create a guaranteed income floor that you literally cannot outlive.
• Delay Social Security to age 70 if health and finances permit. The guaranteed 8% annual increase is essentially the best annuity deal available anywhere, backed by the full faith and credit of the U.S. government.

5. Market Volatility and Sequence-of-Returns Risk

Here’s something that doesn’t get enough attention: it’s not just average returns that matter in retirement—it’s the order of those returns. A 20% market drop in your first two years of retirement can permanently impair your portfolio, even if markets recover quickly afterward. Financial planners call this “sequence-of-returns risk,” and it’s one of the biggest financial concerns for retirees who are heavily invested in equities.

The S&P 500 dropped roughly 19% in 2022, and while it recovered in 2023-2024, retirees who were forced to sell during the downturn to fund living expenses locked in those losses permanently. Those shares are gone—they don’t participate in the recovery.

What you can do about it

• Maintain 12-24 months of living expenses in cash or cash equivalents (high-yield savings, money market funds, short-term Treasuries). This “cash buffer” lets you avoid selling equities during downturns.
• Adopt a “bucket strategy”—dividing your portfolio into near-term (1-3 years, conservative), mid-term (4-7 years, balanced), and long-term (8+ years, growth-oriented) buckets.
• Don’t panic-sell. In my experience, the retirees who suffer the worst outcomes aren’t those who experience bad markets—they’re those who abandon their strategy during bad markets.

6. Scams and Financial Exploitation

The FBI’s Internet Crime Complaint Center reported that Americans over 60 lost more than $3.4 billion to fraud in 2023—a 10% increase from the prior year. And those are only the reported cases; the actual figure is likely far higher. From my years at the CFPB, I can tell you that financial exploitation of older adults is one of the most underreported crimes in America.

Common schemes targeting retirees include Social Security impersonation calls, Medicare enrollment scams, investment fraud promising guaranteed high returns, romance scams, and increasingly sophisticated AI-generated phishing emails that mimic legitimate financial institutions.

What you can do about it

• Never share your Social Security number, Medicare ID, or bank information in response to an unsolicited call, text, or email—no matter how legitimate it appears. The SSA and Medicare will never call demanding immediate payment.
• Set up account alerts with your bank and brokerage for any transaction over a threshold you choose (I recommend $200).
• Consider adding a trusted contact to your financial accounts. Most major brokerages now allow this, and it provides an additional safeguard without granting that person access to your money.
• Read our full breakdown of how to avoid financial scams targeting older adults in 2025 for a comprehensive protection checklist.

The Consumer Financial Protection Bureau maintains an updated list of common scam patterns and provides free resources specifically designed for older Americans and their families.

7. Tax Surprises on Retirement Income

One of the most common financial shocks I see among new retirees is discovering that their retirement income is more taxable than they expected. Up to 85% of your Social Security benefits can be subject to federal income tax if your combined income exceeds $34,000 for individuals or $44,000 for married couples filing jointly. Many retirees have no idea this is the case until they file their first post-retirement tax return.

Add in required minimum distributions (RMDs) from traditional IRAs and 401(k)s—which now begin at age 73 under the SECURE 2.0 Act and will shift to 75 in 2033—and your tax bracket in retirement might be higher than you planned for. The IRS treats traditional retirement account withdrawals as ordinary income, which can push you into a higher bracket and even trigger Medicare IRMAA surcharges.

What you can do about it

• Consider Roth conversions during low-income years (such as the gap between retirement and Social Security or RMD start dates). You’ll pay taxes on the conversion now, but future withdrawals are completely tax-free.
• Be strategic about the order of account withdrawals. Generally, drawing from taxable accounts first, then tax-deferred, then Roth can minimize your lifetime tax burden—but this varies by situation.
• Work with a tax professional who specializes in retirement income. The cost of a few hundred dollars in planning fees can save thousands in unnecessary taxes over a decade.
• If you’re charitably inclined, use Qualified Charitable Distributions (QCDs) from your IRA after age 70½. You can direct up to $105,000 per year directly to charity, satisfying your RMD without increasing your taxable income.

Bringing It All Together: A Retirement Resilience Checklist

The biggest financial concerns for retirees in 2025 share a common thread: uncertainty. Inflation is uncertain. COLA adjustments are uncertain. Healthcare costs, market returns, tax policy, and even your own longevity are uncertain. But uncertainty doesn’t have to mean helplessness.

What I’ve learned across my career—from analyzing consumer complaints at the CFPB to advising on financial policy—is that the retirees who fare best aren’t the ones with the most money. They’re the ones who stay informed, review their plans regularly, and make adjustments before small problems become crises.

Here’s a quick resilience checklist to review quarterly:

• Are your withdrawal rates sustainable for your projected timeline?
• Do you have at least 12 months of expenses in accessible, low-risk holdings?
• Have you reviewed your Medicare and insurance coverage in the last year?
• Is your investment allocation appropriate for your current age and risk tolerance?
• Have you checked your Social Security statement at ssa.gov in the last 12 months?
• Do you have fraud protections and trusted contacts set up on your financial accounts?

None of these steps require an advanced finance degree. They require attention, consistency, and a willingness to adapt. If you take even two or three of the strategies outlined above and implement them this month, you’ll be measurably more secure than you were yesterday. And in retirement, that kind of incremental progress is everything.