Why Americans Are Lacking Retirement Confidence Despite Larger Nest Eggs (127)

Retirement confidence is at its lowest level since 2017, and the twist is that many people are doing “fine” on paper. So why are folks hesitant to stop working? I walk through what I see after helping hundreds of retirees: Confidence is not built by a bigger portfolio. It is built by a clear plan you can follow when inflation spikes, the market drops, or health care costs surprise you.

We start with the data behind the 2026 Retirement Confidence Survey and the real drivers of anxiety: Inflation, rising medical costs, Social Security and Medicare uncertainty, market volatility, and the fear of outliving your money. Then I break down the five building blocks of retirement confidence: Reliable income, cash reserves (including the five-year “war chest” to manage sequence of returns risk), a retirement tax strategy that considers RMDs, Social Security taxation, and IRMAA, thoughtful health care and long-term care planning, and most importantly a written retirement plan that ties it all together.

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Thanks for Listening! 

Jonathan

Transcript

Retirement Confidence Hits A Low

SPEAKER_00 0:03

Retirement confidence just dropped to its lowest level since 2017. And that may surprise you, the stock market has done well over the long term. Many people have larger retirement nest eggs and accounts than ever before, and yet more Americans are worried about retirement than they have been in nearly a decade. According to a recent survey, only 64% of Americans say they feel confident they have enough money to live comfortably throughout retirement, as financial strain, rising cost, and growing concern about the future of Social Security and Medicare continue to weigh on workers and retirees. According to the 2026 Retirement Confidence Survey conducted by the Employee Benefit Research Institute. But there's something even more important here. After working with hundreds of retirees, I've seen that confidence in retirement has very little to do actually with how much money you have, and everything to do with whether you have a proper plan on paper. In this video, I'll show you why retirement confidence is falling, and more importantly, the specific steps you can take to feel more secure about your future. I'm Jonathan Bedner, certified financial planner, co-owner of Paradigm Wealth Partners here in Knoxville, Tennessee, and we help successful professionals, business owners, and retirees make smart decisions so they can retire with clarity and confidence. If you're within 10 years of retirement or already retired, and you want to make better decisions about Social Security, taxes, investing, and income planning, you're in the right

What The 2026 Survey Reveals

SPEAKER_00 1:47

place. So let's talk a little bit more about this survey. This Employee Benefit Research Institute put out this survey, recently released it. This is the 2026 survey that they conducted. And the headline was simple retirement confidence is at the lowest it's been since 2017. Workers and retirees alike are increasingly concerned about inflation, the rising healthcare costs, Social Security uncertainty, market volatility, and outliving their money. And this makes perfect sense. Even if your portfolio looks healthy, there's a big difference between having enough money and knowing how to use that money to create a secure retirement. Many people believe once I hit a certain number, I'll finally feel comfortable retiring. In fact, a lot of times you hear, what's your retirement number? You know, what number do you need to hit to feel good? And maybe that number is a million or two million or five million. But here's what surprises many people. I've actually met many people with with three, five, seven million dollars who are deeply anxious about retirement. And I've met people with much less who feel completely comfortable and at peace. Why do you ask that? Because confidence doesn't come from the size of your portfolio. Confidence comes from understanding where your income will come from, how you can safely spend it, how much you can safely spend, how how taxes will impact your retirement and your plan, what happens if the market declines, and how to handle health care and rising health care and long-term care cost. When those questions are answered, fear tends to fade.

Five Building Blocks Of Confidence

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So let's walk through kind of the five building blocks of retirement confidence. The first is reliable income. During your working years, your paycheck created stability. You knew exactly when the money was coming in, usually twice a month. You had a great idea of how much it was going to be, assuming you weren't on commission. And even if it was commission-based, you had an idea of your sales and what was in the pipeline to know what that paycheck was going to be. Your confidence increases dramatically when you know exactly how your income will be generated. That may be uh may include Social Security, maybe it's pension income, maybe it's rental income, potentially could be interest and dividends, or maybe it's just withdrawals that are coming from your portfolio. In some cases, annuity income. The goal here is simple: replace uncertainty with reliability and repeatable income, having that plan on paper on purpose so that you know exactly what your monthly income is and what expenses it's going to cover. This is a way to have more confidence and less stress.

The Five Year War Chest

SPEAKER_00 4:58

Number two, cash reserves, or as I like to call it at Paradigm Wealth Partners in our firm, your war chest. This is one of the biggest fears retirees have is needing to sell investments during a market downturn. It's called sequence of returns risk. That's when we recommend that we have a five-year bucket, a five-year war chest. This strategy lets you set aside approximately five years of your portfolio withdrawals in a conservative investment, such as cash or CDs, treasuries, a bond ladder, those sort of tools, conservative investments. And the purpose is to provide spending money during market decline so that you can avoid selling stocks when they've gone down in value. When markets fall, you know your near-term income needs are fully covered.

Taxes That Quietly Erode Retirement

SPEAKER_00 5:50

Number three, a tax strategy. Many retirees underestimate how taxes play into their current plan, but also how those taxes can erode their nest egg over time. A lot of times what we're looking at when we're doing financial plans for our clients is what is your lifetime taxable liability, your lifetime tax liability? How much are you going to pay in taxes over the remaining lifetime you have? And so without planning, your retirement income may be taxed through RMDs or Social Security taxation, Medicare and IRMA surcharges, not a direct tax, but a cost for Medicare there, capital gains taxes. When we look at these, creating these, uh doing some tax analysis and looking at your plan, your strategy through a tax lens helps us create some strategic tax planning. So maybe that's through Roth conversions or asset location decisions. Asset location and asset allocation are two totally different things. Coordinating your withdrawals from different account types or timing income to stay in a lower tax bracket. Ideally, paying less in taxes can significantly improve your cash flow and your confidence in retirement.

Medicare And Long Term Care Choices

SPEAKER_00 7:06

Number four, your health care and your long-term care planning. Healthcare costs are one of the biggest unknown expenses in retirement. And many people ask, what will Medicare cover? What about supplemental insurance? Which which plan should I get? How do we prepare for long-term care? You don't necessarily need to insure every possible risk. In fact, you can over-insure if you do that. You do need to have a thoughtful strategy on how you're going to cover some of these expenses. So maybe that's a dedicated savings bucket for some unuh unexpected expenses. Maybe we have some long-term care insurance to cover long-term care should you need it in your later years. Maybe that's a home equity line of credit so that there's money to tap. Or maybe it's just we're going to have family support, we're going to move in with one of our kids and they're going to help support us. All of these are viable options. They're things that you need to make sure you think through as you build out your financial plan. And when you have a plan, that uncertainty becomes more manageable and you have uh less anxiety about your retirement and your life.

Why A Written Plan Changes Everything

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And then number five, a written retirement plan. You need to have a plan on paper on purpose. And this is where everything comes together. And the written plan will help answer the questions that keep people up at night. Am I on track to retire? How much can I spend? How do I turn my nest egg into a paycheck? When should I claim Social Security? What if the market drops? What happens if one of my spouses, not one of my spouses, I guess you don't have multiple spouses. What happens if uh your spouse dies prematurely? There's an unexpected death. So without a written plan, your retirement can feel like driving across country without a map. The plan, the strategy, having that written plan is so that you know exactly what we're going to do, why we're going to do it. And if something comes up unexpected, we've already got, you know, the next route, the pivot that we're going to take, so that your plan is not set back and we don't have a catastrophic collapse. Having a plan is key to having a successful and confident.

A Couple With Money And Fear

SPEAKER_00 9:25

Let's walk through uh a real life example. Uh, a couple came to us about a year ago, um, and they were early 60s. They had about two and a half million dollars saved, they had no debt, they had healthy savings habits. Uh, everything looked really, really good on paper. They were in excellent shape. Um, they were afraid to retire. And uh a lot of that was concern about what if the market crashes right after we stop working. And we talk a lot about this on this channel, the sequence of returns risk and and having a war chest. And so when we built that comprehensive retirement income plan and they had a strategy, we were able to show them how much you could safely spend, when to claim your social security, tax-efficient ways to withdraw your income out of your portfolio, out of your nest egg, and creating that five-year war chest for your market downturns. At the end of the process, you know, they there was relief. Um, the wife really felt confident in the strategy. And actually, she said to me, I don't really uh have anxiety around having enough money now. Um, what I feel is uh a weight is lifted off my shoulders because we actually know how to how we turn our investments into income. We can have that repeatable monthly income just like we're working. And so what we did was we went from no plan and no strategy at all to having having kind of these core answers for them that provided them the confidence to know, okay, we're gonna be okay in retirement.

Purpose After The Paycheck Ends

SPEAKER_00 11:08

Retirement is not just a financial transaction or transition, it's actually an emotional one. And it for decades, your identity may be tied to your career. A lot of times, actually, when you meet somebody, you're talking to somebody, you identify yourself as you know what you do. So a lot of times when I'm talking to somebody, I say I'm Jonathan Bedner, I'm a financial planner, or I own Paradigm Wealth Partners. And you know, we tie ourselves to the identity of our career. So that is not uncommon. And your your paycheck in that career created the certainty. Retirement requires trust, trust in your plan, your savings, your ability to adapt. And that's why purpose matters. The happiest retirees that I see have purpose, they have strong relationships, they're meaningful activities, they're involved in, you know, their guitar club or mentoring or playing pickleball, staying active, reading, crocheting. They're doing meaningful things that provides happiness for them. Uh they have good health habits. They're going to the gym, they're eating healthy, they're walking, they're being active and mobile. Um, they also have a sense of purpose. Maybe that's with their church or philanthropy or volunteering time. All of those are really, really important and are probably as valuable to a successful and confident retirement as just making sure you have enough money. Money is a tool, but confidence comes from knowing that your financial life supports the life you want to live. In fact, I trademarked a phrase, create the life you love. My goal when we're working with retirees, uh, business owners, professionals, is that you know, money is just a tool and time is our biggest asset. So, what we want to do is let money support that life. And that's why I created that tagline: create the life you love. It's not gonna just come to you. You have to build it, you have to create it, you have to envision it. That's on you to think through how do you do that.

Five Steps To Act On Today

SPEAKER_00 13:14

So, how do we increase your retirement confidence today? If you're feeling uncertain, here are five practical steps for you. Number one, calculate your retirement spending need. Know what your lifestyle actually costs. Number two, build a retirement reliable income strategy. Map out where your income will come from. Number three, stress test your plan. Evaluate your plan, how it performs during inflation and recessions, volatile times, if longevity uh scenarios, if you're gonna live longer than you than you think you will. All of those things need to be stress test in your plan. Number four, develop a tax strategy. Look at your tax return, analyze your tax return, and look for opportunities to reduce your lifetime tax income or your lifetime tax liability, is what I should say. And number five, put everything in writing. Have a documented plan that creates clarity, that you have actionable steps that that you can uh go back and look at and use as guidance so that you're not making emotional, hasty decisions with your retirement, with your

Where To Get Help And Next Steps

SPEAKER_00 14:29

income. So, in closing, if your retirement is you're not as confident in your retirement as you'd like to be, um, you're you're not alone. Uh the good news though is confidence doesn't require the perfect market, it doesn't require, you know, the perfect Social Security plan, it doesn't require the perfect uh specific account balance. What it does require is a thoughtful plan. If you'd like help determining whether you're truly ready for retirement, you can visit our website at paradigmwealthpartners.com or you can schedule some time on my calendar using the link in this video description. We specialize in helping successful professionals and retirees build personalized retirement income strategies so that they can have that confident retirement. Thanks for joining me on another episode of What The Wealth. If you enjoyed the episode today, smash that subscribe button. It helps me more than you think. Also, if you found this episode insightful and a light bulb went off, share it. Your friend Aunt Judy, the random guy in the office who's always talking about investments. Wealth isn't about just the chick change. It's about our choices, chances, and changing our financial futures.

Important Disclosures And Disclaimers

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The information in this podcast is informational and general in nature and does not take into consideration the listener's personal circumstances. This podcast is not intended to be a substitute for specific in financial, legal, or tax advice. You should consult the approved qualified professional prior to making a final decision. Securities offered through LPL Financial, member FINRA SIPC. Paradigm Wealth Partners is the other business name for Independent Advisor Alliance. Investment Advice offered through Independent Advisor Alliance, a registered investment advisor. Independent advisor alliance, and Paradigm Wealth Partners are separate entities for LPL Financial.