What Will Retirement Really Look Like?
How you imagine retirement and what it will really look like may be different. Comparing your ideas with the experiences of others may help prevent surprises.
Key Takeaways
For many retirees, retirement doesn’t look the way they imagined.
An important strategy for enjoying retirement is to plan with realistic expectations.
Hearing the reality of current retirees may help you avoid retirement surprises.
What Do People Expect Retirement to Be Like?
Retirement has long been hailed as the ultimate achievement after a lifetime of working. However, people's perceptions of the "golden years" have changed. For many Americans, concerns about how long their retirement money will last and whether they can maintain their current lifestyle are now the norm.
A recent study notes that people expect to retire later and at an older age than they actually do; nearly half of survey respondents said they retired sooner than they’d planned.1 Factors such as health (yours or a loved one's), wealth, age, marital status change, mortality expectations and major illness diagnoses all play an essential role in determining when someone actually retires.
Let's look at what people say about their retirement expectations in American Century Investments’ latest national research and see if your expectations align.
What Worries People Most About Saving for Retirement?
Bumps in the road wrought by market volatility and inflation concerns present challenges to saving and planning. Rising housing costs remain challenging, and worries about volatility have risen.
- Saving enough. 82% of retirement plan participants are at least somewhat worried that they won’t have enough for retirement, including 9% saying it keeps them up at night.
- Market swings. 80% worry about how market volatility might impact investment values close to retirement.
- Housing costs. 68% are concerned about rent and mortgage affordability.
Source: 12th Annual Retirement Survey of Plan Participants, American Century Investments, 2025.
Will Your Standard of Living Change in Retirement?
When asked about the standard of living they expect in retirement versus today, 1 in 3 respondents anticipated living better in retirement than they do now. However, the closer they were to retirement, the less optimistic they were.
- Mostly the same or better. 30% of those surveyed expect their standard of living to be a little better or much better, and 44% expected it to be about the same.
- For younger people, better expectations. 46% of participants under 40 expect a higher standard of living.
- For older people, lower expectations. Just 13% of those ages 55-70 expected a higher standard of living when they retire.
Source: 12th Annual Retirement Survey of Plan Participants, American Century Investments, 2025.
The Unexpected: 4 Common Retirement Surprises
In addition to the possibility of retiring earlier than planned, retirees often encounter some unexpected issues.
1. You May Be Busier—and You Need People
Many people are much busier than they thought they would be as they transition from working to retirement. Filling your time may be critical to a happy retirement and health, but don't discount the human connection.
According to an ongoing Harvard study begun in 1938, the enduring key to happiness in retirement is cultivating and maintaining relationships with others.2 Staying busy is good, but it may not be enough without other people.
2. You May Spend More, Especially at First
Over the years, I’ve found that many of my clients struggle to switch from a saving-and-investing mindset to a spending mindset. It can be hard to spend what you’ve built over a lifetime of working.
The traditional rule of thumb says you need to have 70% to 80% annually of your current salary to maintain your current lifestyle in retirement. However, with ongoing inflation, many retirees may now need more. It’s also important to remember how specific expenses may change.3
Housing costs may decrease due to downsizing, but health care needs and costs may increase. And with your extra time, you may spend more on your lifestyle—extra vacations, new hobbies or other adventures in your golden years. Be sure to include these in your retirement budget.
However, as you move through the stages of retirement, you might find yourself spending less. Working with an advisor can create a plan for income and help you avoid running out of money in retirement.
3. You May Need Time to Adjust
Some workers expect to gradually transition into full retirement rather than choosing a specific date. This can be a good thing if you can do it. Moving from full-time work to full-time free time can be a difficult adjustment.
Many retirees report feelings of boredom and a loss of purpose—but taking time to find purpose through a new skill or interest can help you adjust. Retirees with purpose are often happier and healthier and may even live longer.4 Defining your purpose for those years in retirement planning may help your years after working be more fulfilling.
Planning your time in retirement should be done with your significant other. The adjustment period can be more challenging if you both retire simultaneously. Some ideas for the transition include reducing your workload, taking on favorite parts of the job or moving to part-time if possible. A part time job that has nothing to do with your career or is volunteer oriented may be fulfilling.
4. Expenses Can Catch You Off Guard
Many retirees are surprised by the price tag of essentials such as health care, home maintenance and car maintenance. They may also be unaware that Medicare does not cover all costs—including long-term care. Others may not have anticipated the costs of repairs, especially if you've already deferred home maintenance that needs addressing.
These may be especially important to plan for if you also carry debt in retirement. While it's not the end of the world to still owe creditors, the more you can pay down debt before retirement, the more money you may have to cover your necessary expenses.
It may also be a good idea to take care of maintenance before your last paycheck. If you can afford it, consider upgrading to newer cars or performing necessary maintenance on current ones, tackling home repairs or desired remodeling, and replacing older appliances and water heaters or HVAC systems.
How Can You Plan for Surprises in Retirement?
Learning from the experience of others is wise for any situation but especially for the essential things you can learn from current retirees. How can you sidestep surprises in your retirement? Check your expectations and create a plan that covers all aspects of life—emotionally, physically and financially.
If you need help with the financial part, our financial advisors are here for you. Aside from planning, an advisor can help point out gaps, determine tax and withdrawal strategies or confirm you're as prepared as possible.
Authors
Financial Consultant
How Do You Know If You’ll Be Ready for Retirement?
Find out whether you and your finances are ready for the transition.
36th Annual Retirement Confidence Survey, Employee Benefit Research Institute (EBRI) and Greenwald Research, April 2026.
“Things money can’t buy — like happiness and better health,” The Harvard Gazette, May 20, 2025, from the Harvard Study of Adult Development.
“Average Spending by Age for Those 55 and Up: How Do You Compare?” Kiplinger, July 21, 2026.
'We All Need Purpose When We Wake Up in the Morning': Finding Meaning in Retirement Leads to Happiness and Health, MarketWatch, morningstar.com, July 2023.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
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