Retirees Are Facing More Problems Than Ever

The coming year may be an inflection point for retirement planning.

The US population is aging rapidly, with the share of Americans aged 65 and older projected to climb steadily over the coming decades. Traditional pensions aren’t making a comeback either (quite the opposite), but the good news is that there is a new generation of asset classes that may help provide some of the retirement security that savers had enjoyed during  the pension era, according to the latest report from the annuity and retirement services provider Athene. New strategies in private assets could also help advisors guide clients toward better retirement outcomes.

“A financial advisor can really shine by not letting go of the upside opportunity that their customers have, but providing a lot of protection at the same time,” said Mike Downing, an author of the report and Athene’s co-president. “Retirement savers have been saving, but not quite enough.”

Demographics Meet Market Risk

Two main risks loom large for retirees heading into 2026, according to the Athene report. The first is market concentration: With a handful of mega-cap technology stocks accounting for more than a third of the S&P 500’s value, an AI-driven equity correction would ripple quickly through portfolios that are already strongly linked to the index. The second risk is inflation. Whether driven by policy shifts or interest rate changes, shrinking purchasing power would hit retirees hardest, given their reliance on fixed or semi-fixed income streams. “Interest rates have been pretty volatile. There’s no clear path going forward,” Downing told Advisor Upside. “And there’s 12,000 new [retirees] coming in, reaching age 65, every day.”

The timing is ominous, with many prospective retirees not well prepared. According to the report:

• There is a $4 trillion “savings gap” between what Americans in the aggregate should have saved for retirement and what they currently have saved.
• Less than 10% of Americans’ overall wealth comes from pensions, on average.

The Growing Role of Private Assets. Private equity and private credit are also now being integrated into retirees’ plans. US pensions already hold 25% or more of assets in private markets, according to the study, but for everyday retirement savers, exposure has historically been near zero. That gap is narrowing as platforms evolve, Downing added.

“Other tools that were available at very high net worth [levels]… there’s been this kind of democratization of those, looking for ways to make those more accessible for savers by creating different products that can be utilized by more day-to-day investors,” Downing said. “So not just the ultra high net worth, but mass affluent investors, as well.”