Why many facing retirement no longer believe in retiring at 65

According to an Advisor Authority study powered by the Nationwide Retirement Institute, nearly six in ten pre-retiree investors said that their expectations for retirement have changed significantly in the last five years. Many also indicated they do not subscribe to traditional retirement norms and strategies in the same way that previous generations did and cited today’s economic environment as the cause.

These norms and strategies include:

The 4% Rule: More than a third of pre-retirees (35%) do not find the 4% Rule (withdrawing 4% of your retirement portfolio to make it last through retirement) to be a relevant retirement rule of thumb in today’s economic environment. Some (13%) of investors in this group are abandoning the 4% Rule altogether.

100 Minus Age: Additionally, 53% do not find the ‘100 Minus Your Age in Stocks’ rule (deciding the portion of your portfolio dedicated to stocks based on your age) to be relevant in today’s economic environment.

Magic Number: Pre-retirees are also abandoning a ‘target’ retirement age or savings goal. Over half of pre-retiree investors do not believe in the concept of a ‘magic number’ for retirement savings.

Retiring at 65: Nearly two thirds (64%) of respondents said that the norm of retiring at age 65 doesn’t apply to people like them, up from 59% a year ago.

Reasons for moving away from norms

So, why are many pre-retiree investors moving away from traditional retirement norms and strategies? As explained by Craig Hawley, president of Nationwide Annuity, many grew up watching their parents and grandparents retire with the confidence that came from having traditional pension benefits – and thinking that those same benefits would be there for them when it came time for them to retire. “However, “he pointed out, “we know that’s not the case, as many companies have shifted to offering defined contribution retirement plans instead. Today’s pre-retirees are also facing lingering inflation and market volatility, causing heightened concerns about running out of money in retirement.”

Additionally, Hawley said, “our survey found 34% of pre-retirees financially support their children or provide care for aging parents, with 15% of them saying they have not been able to save for retirement as a result. This unique set of circumstances is causing some pre-retiree investors to abandon conventional retirement strategies used by previous generations – and with only 40% of them working with a financial advisor, more than half of them don’t have a trusted source of financial guidance to talk through how those traditional retirement strategies may fit their specific needs.”

But many advisors still support traditional rules

Facing largely ambiguous retirement prospects, pre-retirees are turning to financial professionals – with many having done so in the past year, according to the survey. Of the 40% of pre-retirees who currently work with a financial advisor, more than a quarter (28%) started working with their advisor during the last 12 months.

But advisors are still supporting traditional retirement rules of thumb, even as their pre-retiree clients abandon legacy investment practices. For example, a significant majority of advisors find the 4% Rule to be relevant in today’s economic environment, and nearly three fourths find the ‘100 Minus Your Age in Stocks’ Rule to hold value, too.

Why advisors are supporting these norms

There are several reasons why advisors are still supporting these norms. As explained by Hawley, traditional retirement strategies have stuck around for a long time, and that’s because they have worked for many retirement savers. In fact, he said, “84% of advisors in our survey found the 4% rule to be relevant in today’s economy and nearly three-fourths found the ‘100 Minus Your Age in Stocks’ rule to hold value too. What’s important to understand about these traditional rules of thumb is that they are not one-size-fits-all. That’s why it’s important for investors to work with a trusted advisor who can help determine which ones, if any, are right for their specific financial situation and goals.”

Reasons for the disconnect

So, what is causing this disconnect between advisors and their pre-retiree clients? “Our data shows investors with an advisor seem to be more receptive to traditional rules of thumb,” explained Hawley. “In fact, three fourths (76%) of non-retired investors with an advisor find the 4% rule to be somewhat or very relevant in today’s economy. However, 60% of pre-retiree investors do not currently work with a financial advisor and are making decisions about their retirement on their own. As they face continued volatility, uncertainty and worry about saving enough for retirement, they may be making financial decisions based on emotion. It’s possible they are inspired by other sources like media or online influencers who gain attention by challenging traditional thinking. There is nothing wrong with challenging traditional thinking, but it’s risky to do so without the trusted perspective of someone who understands your personal goals and financial situation,” he said.

Helping clients prepare for a more secure retirement

So, what can financial professionals do to help their pre-retiree clients chart a course for a more secure retirement ?According to Hawley, the best thing a financial professional can do right now to help pre-retirees achieve a secure retirement is help them create a holistic plan that addresses factors like Social Security, health care, long-term care, taxes and income in retirement.

“By sitting down with their clients and creating these plans, they can help their clients identify any gaps and find solutions,” explained Hawley. “That conversation should start with clearly defining goals and concerns. For many, fear of outliving income is top of mind as Americans live longer.”

The solution for that challenge could take many forms, including solutions like annuities, Hawley said. According to another recent survey from the Nationwide Retirement Institute, 33% of workers aged 55-65 said an annuity or investment that guarantees income they can’t outlive would be most helpful in preparing to live to 100.

The Harris Poll, on behalf of Nationwide, conducted an online survey in the U. S. among 610 advisors and financial professionals and 2,524 investors ages 18+ with investable assets of $10K+, from January 6-25, 2025. Among the investors, there were 379 pre-retirees in January 2025 and 336 pre-retirees in August/September of 2024.

 

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