Older Americans Tap Retirement Savings Early as 90% Fear Inflation Erodes Assets
Updated
Updated · savingadvice.com · May 30
Older Americans Tap Retirement Savings Early as 90% Fear Inflation Erodes Assets
3 articles · Updated · savingadvice.com · May 30
Nearly half of retirees say expenses are higher than expected, and more older Americans are drawing down retirement savings earlier than planned to cover daily costs and emergencies.
Schroders' 2026 survey found 90% worry inflation will erode assets, while retirees spend an average 16% of monthly income on healthcare, including costs Medicare does not fully cover.
Unexpected shocks are adding pressure: the Society of Actuaries said 59% of retirees left work earlier than expected, often because of health issues, layoffs or caregiving duties.
Hardship withdrawals are also rising, with Vanguard reporting 6% of 401(k) participants took them in 2025, up from 4.8% a year earlier and above pre-pandemic levels.
The trend raises the risk of depleting nest eggs too soon, especially when retirees sell assets in volatile markets or make repeated withdrawals that cut future compounding.
With retirement accounts hitting record highs, why are more Americans being forced to tap them early?
As traditional retirement pillars crumble, what new solutions can secure our financial future?
Retirement at Risk: The 2025-2026 Spike in Early Withdrawals, Inflation, and Healthcare Costs Facing Older Americans
Overview
Between 2025 and 2026, older Americans have faced growing financial strain, leading to a notable surge in early withdrawals from retirement savings. This vulnerability is driven by persistent market volatility, which creates economic uncertainty and pressures retirees to adjust their spending and savings strategies. Many feel compelled to tap into their long-term funds sooner than planned, often due to worries about future access to essential resources. Some even sell investments during market downturns to cover immediate expenses, locking in losses and increasing the risk of depleting their retirement savings too soon.