By Sophia Financial Solutions | Published: May 1, 2025

A Reality Check on Retirement Expectations

Millions of Americans imagine retirement as a time of freedom, travel and enjoying the fruits of decades of hard work and sacrifice. But the reality many face is far different: outliving their savings, working longer than planned or compromising their lifestyle. Let's take a deep dive into the widening gap between what people expect in retirement and what they’re actually on track to experienece, then lay out clear, practical steps to pivot while there’s still time.

Why Most Retirement Dreams Are Built on Outdated Assumptions

Retirement planning used to be simple. Work 30 years, collect a pension and rely on Social Security. Today, that model can be a cruel illusion. Most Americans no longer have pensions, which for many have been replaced by 401(k) plans that frequently experience significant setbacks due to market volatility. Social Security may be reduced by the time many retire. And then there's taxes and inflation, which can take a heavy toll. What people expect and what they’ve actually prepared for are often miles apart.

The Silent Impact of Inflation

$1 Million used to be enough. But with inflation averaging 3–7% annually in key sectors (healthcare, housing and food), retirees need far more than they think. A retiree with $5,000 per month in expenses today could need over $8,000 a month in 15 years. Inflation erodes fixed-income power year after year and it's only gotten worse in the post-COVID era. Simply put, it your income doesn’t grow, your lifestyle will shrink.

Healthcare and Long-Term Care—The Hidden Budget Busters

A 65-year-old couple today may spend over $350,000 on healthcare alone in retirement. Medicare doesn’t cover everything. Long-term care costs can exceed $90,000 per year, per person. One health event can wipe out decades of savings. Most plans ignore this. We don’t.

Why Working Longer Isn’t a Strategy

Many plan to “just work longer” if needed. But consider this: Over 50% of retirees leave the workforce earlier than planned due to illness, layoffs, or caregiving responsibilities. Age discrimination and health issues reduce options. More work is not a financial plan...it’s a potentially dangerous gamble.

How the Market Can Wreck Your Timing

If your retirement is tied to the stock market, you’re at the mercy of volatility. A crash in the first five years of retirement can permanently damage your portfolio. “Average” returns don’t matter—sequence of returns does. You may be forced to sell low to generate income. And even if the correction happens earlier in your savings timeline, would you rather endure the stress of waiting for your funds to recover to pre-correction levels or never experience it to begin with? A safer income foundation is critical.

Building a Strategy That Works in the Real World

You need a plan that includes guaranteed income sources (like annuities), tax-free growth (via IULs and Roth IRAs), inflation protection and risk mitigation. These form the foundation of a durable retirement.

Introducing the Pivot Plan

We help clients create a customized Pivot Plan, which is custom-designed to bridge the gap between expectations and reality. Key components include analyzing current income gaps, modeling future spending needs, layering guaranteed income with flexible tax strategies and accounting for healthcare and long-term care costs.

Real Case Study—The Turner Family

Jim and Denise Turner, ages 59 and 57, thought their $600,000 in savings would carry them comfortably. After inflation projections, healthcare modeling, and income gap analysis, they discovered a $180,000 shortfall. We created a plan that rolled over a portion of their retirement savings into a fixed indexed annuity, shifted assets into an IUL for tax-free growth and added a long-term care rider to their life plan. Now they’re projected to have lifetime income that keeps pace with inflation...and gives them peace of mind.

The Cost of Waiting

Every year you delay rebalancing your retirement strategy your tax exposure increases, you lose time for your money to compound and your options narrow. Waiting is the enemy of financial freedom.

Reclaim Your Retirement Vision

You deserve the retirement you’ve worked so hard for. But it won’t happen by default. It requires a plan...a pivot. We can help you take control, eliminate uncertainty, and design a future that’s sustainable and secure. Don’t wait until it’s too late. Book your pivot planning session today.