CFP Board survey: Social Security, Medicare fears high shopper issues
Half of planners have seen shoppers raid retirement financial savings or lower contributions as affordability pressures mount, CFP Board finds
Clients are asking their monetary planners whether or not Social Security and Medicare will nonetheless be there after they want them, with many additionally drawing down their very own retirement financial savings to deal with rising prices based on a brand new CFP Board survey.
Seventy-eight % of licensed monetary planners stated the long-term viability of Social Security has been an necessary matter in shopper conversations over the previous 12 months, based on the new CFP Board poll launched this week. A barely decrease however nonetheless important 73% majority stated the identical about Medicare.
Only three matters ranked greater with shoppers: healthcare prices and retirement plans, every cited by 88% of planners, and tax coverage, cited by 84%.
Retirement financial savings bear the brunt of affordability strain
Half of the planners surveyed stated that they had seen a minimum of one shopper decide prior to now 12 months that eased price strain on the expense of long-term safety.
- The commonest was withdrawing from retirement accounts early, reported by 29% of respondents.
- 23% noticed shoppers delay wanted property planning updates.
- 20% noticed shoppers lower or cease retirement contributions.
- 18% noticed shoppers tackle high-interest debt to cowl bills.
- Smaller shares noticed shoppers promote investments at a loss (10%) or let life, well being or incapacity protection lapse (9%).
Plan-level business knowledge level the identical method. In its most recent How America Saves report, Vanguard discovered 6% of its retirement plan contributors initiated a 401(ok) hardship withdrawal in 2025, up from 5% in 2024 and a pre-pandemic common of two%.
The 2026 Social Security and Medicare trustees stories initiatives that the Old-Age and Survivors Insurance belief fund will be depleted in the fourth quarter of 2032, whereas the Medicare Hospital Insurance belief fund is projected to be depleted within the second quarter of 2033.
Affordability angst tinges upbeat outlook
The survey reveals a break up between how shoppers really feel general and the way they really feel about prices. Sixty-nine % of planners stated shopper issues about affordability have grown over the previous 12 months; 17% stated these issues had elevated rather a lot, and solely 3% reported a decline.
Still, 68% of respondents described their shoppers’ general monetary outlook as constructive, and fewer than 1 in 10 described it as damaging.
The price nervousness is aimed extra on the future than the current. Sixty % of planners stated shoppers are involved about affording long-term objectives and wishes, in contrast with 53% for day-to-day prices.
Sixty-one % stated shoppers fear that a minimum of one monetary purpose is now out of attain. The objectives seen as most out of attain embrace buying a home (34%), reaching monetary independence (27%), and affording healthcare (23%).
Battening down the hatches
Eighty-five % of CFP holders stated they’re taking particular steps to assist shoppers deal with affordability pressures with out giving up long-term objectives. Just over half of planners stated they have been stress-testing monetary plans towards a recessionary situation (54%), and an equal quantity stated they have been encouraging shoppers to construct or reinforce shoppers’ emergency funds to a particular goal.
Approximately one-third of planners within the survey stated they have been telling shoppers to revise retirement contribution charges fairly than stopping altogether (34%); step up the tempo in paying down debt (33%); and pause or dial down spending on non-essentials (32%).
Many shoppers have already acted. About three-quarters of planners stated shoppers have taken or thought-about monetary steps due to price issues, together with:
- Cutting discretionary spending (46%)
- Updating retirement plans (40%)
- Delaying a serious buy equivalent to a house or automobile (32%)
- Paying down debt (31%)
The survey additionally took a learn of CFP holders’ outlook on the upcoming midterms’ potential affect. On that entrance, 74% stated they count on rates of interest to remain largely unchanged after the election, and roughly three-fifths anticipated no affect on the inventory market (59%) or the US macro economy (57%).
