Peak 65 consumers hit the pause button on retirement

Financial market volatility, persistent inflation and increased concerns about Social Security’s viability are leading consumers in their early 60s to consider hitting the pause button on retirement.

The 2025 Protected Retirement Income and Planning Study revealed that 30% of consumers aged 61 to 65 are considering delaying retirement. Meanwhile, 58% of consumers ages 45 to 75 are concerned that their Social Security benefits will be reduced. Two-thirds (65%) of financial advisors are changing their retirement investment advice to clients, with 50% saying they are putting more client investments into annuities, which ranks as the most popular change in investment strategy.

The PRIP Study is the only annual, nationwide survey of both consumers and financial advisors, conducted this year by IPSOS. The first chapter of the report highlights critical insights on the state of retirement and retirement security, as millions of Americans reach the traditional retirement age of 65. This is a historic milestone that the Alliance for Lifetime Income identified and has termed Peak 65.

“Many of those belonging to the largest wave of retirement age Americans are hitting the pause button,” said Jason Fichtner, executive director of the Alliance’s Retirement Income Institute. “The Peak 65 surge, chaotic changes at the Social Security Administration, and heightened fears over Social Security’s future are a trifecta of worries prompting many to claim benefits early.”

With retirement concerns and uncertainty rapidly mounting, it’s no surprise that over half (54%) of baby boomers and Generation X are fearful of outliving their savings in retirement – up from 48% in last year’s survey. An overwhelming 95% of preretirees said protection is important to their retirement plans.

“Just as businesses hesitate to make big moves in times of economic uncertainty, many working Americans are afraid of taking the leap into retirement,” said Jean Chatzky, an Education Fellow with the Alliance’s Retirement Income Institute and CEO of HerMoney. “With so many looking for greater retirement security, it’s no surprise that half of financial advisors now say they’re adding protected income from annuities to their client’s portfolios.”

What leads people to delay retirement?

The survey also found a number of consumer concerns leading to delaying retirement.

Those lacking a pension or annuity are twice as likely (36%) to consider delaying retirement than those without either source of protected income (17%). Fourteen percent are “definitely” considering claiming Social Security earlier than originally planned, while 21% are “somewhat” considering doing so.

Nearly half of retirees (47%) indicate that spending money in retirement gives them anxiety, while 33% said they are spending money faster in retirement than anticipated. More than four in 10 retirees are looking for ways to spend less, and 11% of them are looking for part-time work to supplement their income. Of those who started working again after they retired, 51% did so because they wanted or needed the money, while 37% did it for social interaction or mental stimulation.

Sixty percent of Gen Xers believe retiring and never returning to work is still possible, while 68% of Peak 65 consumers feel the same.

Inflation, health care top the list of worries

Inflation and health care costs are top economic concerns when it comes to retirement, with 67% saying inflation is their biggest worry while 60% are more fearful about health care costs. Outliving savings ranks third, with 42% of respondents saying that is their top retirement fear.

Health issues loom large when identifying quality of life concerns in retirement. A major physical health event (67%), becoming physically dependent on others (65%), and experiencing cognitive decline (57%) are chief among these concerns.

Investors turn to annuities for stability in uncertain times. About two-thirds of financial advisors indicated that they changed their retirement planning approach over the past year to address client concerns about market volatility, inflation and rising interest rates. Half of financial advisors said they are putting more client investments into annuities, which ranks as the most popular change in investment strategy.

More than one-third of financial advisors indicated that they put more assets into U.S. Treasuries, while equities were a mixed bag with 30% investing more into stocks and 30% decreasing their exposure to them.

In the event of $100,000 windfall, 64% of consumers aged 45 to 75 said they would put the money into an annuity instead of the stock market, while 62% of advisors said they would recommend investing in the stock market.

The survey showed confidence in retirement correlates with financial planning. About one-third of Gen Xers and 49% of Peak 65 consumers are confident about being able to create a retirement income plan. This compares with 70% of consumers ages 45 to 75 who work with a financial advisor reporting there are confident.

About one-third of consumers ages 45 to 75 they have a detailed retirement plan, while 31% say they have a set of goals or a direction in mind but lack a detailed plan, and 34% say they don’t have any kind of plan. More than 60% of consumers ages 45 to 75 believe they are on the right track for a financially secure retirement, but 54% are also fearful of outliving their savings.