Editor’s note: This story was originally published here boldin.
Federal Reserve’s latest Survey of Household Economics and Decision Making Found that 73% of American adults say they are financially OK or living comfortably. It seems like good news until you think about it Only 35% non-retired Think their retirement savings are on track. The tension between those two numbers says a lot about how people experience money.
Feeling financially stable and being financially prepared are two different states. Fed survey Both have to be measured at the same time.
Most Americans currently feel stable. Preparing for retirement is a separate calculation, one that sits on the edge of the to-do list: Not urgent enough to compel action, but hard to ignore.
If the second number resonates, you’re in good company.
What does the Fed’s Financial Wellbeing Survey measure?
The Federal Reserve’s Survey of Household Economics and Decision Making (SHED) covers a wide range of financial situations (savings, employment, housing, retirement), but it measures self-reported sentiment, not whether any of these will be stressed.
When the survey was fielded last October, respondents mostly felt well economically. The labor market was stagnant, spending and income were about equal for most families, and most adults paid all their bills a month in advance.
That snapshot is already out of date. Since the survey closed, inflation has increased rapidly, driven by rising energy prices due to the war in Iran. CPI increased 3.3% year-on-year in March 2026, then rose to 3.8% in April, the highest annual rate since May 2023, with energy costs about 18% higher than last year. The pressure that seemed manageable in October is now likely to become more severe.
Self-assessment of how things feel today reflects the moment, not what a more difficult person would reveal. A job interruption, a large medical bill, or poor market returns early in retirement don’t show up in the snapshot.
This is why the retirement-readiness number is a more honest indicator. You may feel good financially today and still be woefully unprepared for retirement 10 or 20 years from now. After all, they are different things.
The good news is that the distance between those two numbers is primarily a data issue.
Most people who have closed that gap didn’t do so by saving more in a given year. They did this by mapping what they really had and what they really needed, and found the approach suggested by their concern more practical.
Why isn’t financial well-being the same as being prepared to retire?
Financial well-being reflects how things are going right now. Preparing for retirement depends on how your financial situation is Durable for 20 or 30 yearsHealth care costs, Social Security time tested, and a sequence of returns you may not want to plan for.
This gap has grown over time and hides a wide income divide. The share of non-retirees who feel on track fell from 40% in 2021 to 35% today, where it has held for the past two years. Only 7% of non-retirees with household incomes under $25,000 say their retirement savings are on track. Among those earning $100,000 or more, 59% do so.
Those numbers track income, but they also track whether someone made a further photo, and that part isn’t determined by income alone.
Two families with the same account balances could be in very different situations, depending on whether one of them has checked the numbers against the challenging scenario.
Retirement preparation provides a model of how your income, expenses, health care costs and Social Security timing fit together over two or three decades, including situations you can’t predict now. Not many people have made it. This is what the figure of 35% says.
If you haven’t made it yet, this is a solvable problem. A useful first step is to see where you stand compared to families at your age and income level. Retirement savings by age Gives you that benchmark before running anything more detailed.
What does a sluggish job market mean in your 50s?
Job interruptions in your 50s come with costs that don’t apply as early in your career, and they add up. That’s why a labor market that’s marginally softer at this stage than it was a decade ago makes more sense — and those who have thought about that scenario handle it differently than those who haven’t.
2025 SHED captured this change. The share of adults who said finding or keeping a job was at least a minor concern rose to 42%, up from 37% a year earlier. Up to 7% of all adults were laid off. The market is still in fair shape, but it is weaker than before.
That situation has different impacts depending on where you are in your career.
For a 35-year-old, layoff is a real blow, but people of this age can recover from it. For someone in their mid-50s, the math changes.
Unplanned exit from work at 57 or 58 narrows the savings window, drags out difficult Social Security decisions, and creates a Health coverage gap before Medicare Bridging it at 65 could be expensive. These are real costs, and each cost is specific enough to be estimated in advance.
SHED also found that 46% of current retirees cited at least one of the following factors for stopping working:
- Health problems or disability: 28%
- Caring for a family member: 17%
- Lack of available work: 11%
a separate Society of Actuaries survey A report published this month found that 59% of retirees left the workforce sooner than they expected. Health was the leading reason, but job loss affected about 1 in 5 early retirees at all income levels.
Retirement coming on schedule does so because someone planned it Chances are it won’t happen.
If there have been recent changes at your company, or job security feels less certain than before, it helps to examine this as a concrete scenario. For example: a retirement that starts at age 58 instead of 62, with health care premiums between $15,000 and $20,000 a year before Medicare, and a Social Security benefit reduced because you claimed before your full retirement age.
People who have done that analysis almost always come away with more clarity than they expected. Running that scenario now, before any of those changes occur, turns the risk into a decision.
Unexpected expenses affect more families than most plans
About 59% of adults had at least one large unexpected expense in the past 12 months. The most common were:
- A major vehicle repair or replacement: 30% adults
- A major home or appliance repair: 22%
- Unexpected major medical expenses: 21%
The average cost for each of the three categories was between $1,000 and $2,000. Also, only 63% of adults said they would cover a hypothetical $400 emergency using cash or savings. That share has been flat for three years, down to 68% in 2021.
Most of us have handled an unexpected bill and moved on. The question is not whether you can assimilate it. Most of the family members do this. It depends on whether your plan is coming at a time when your other options are already limited.
A more useful framework is whether you can handle one of those expenses in the first few years of retirement, or a job situation change in the same year, without risking your savings.
It’s easier to act on an uncomfortable answer you’ve thought about than an open-ended question you’ve been avoiding.
What is needed for real financial well-being
People who feel really confident about retirement usually can’t point to a single thing that made it successful. Mostly this came from answering some specific questions about their own situation. Real financial well-being comes from four things working together:
- Liquid Reserves: This can absorb a significant unexpected expense without having to withdraw money from retirement accounts before you’re ready.
- Income Flexibility: This means that your financial situation is not entirely dependent on a job, an account, or a return assumption.
- Scenario Modelling: Where you’ve checked your numbers against earlier-than-expected retirement, higher health care costs, or rough market fluctuations
- A review habit: It keeps planning as your life changes
When those pieces fall into place, retirement stops feeling like unfinished business. The real challenge is to have all four of these in place before your circumstances change, and when one looks closely, strengthening at least one area usually emerges.
If you find that you are strong in income elasticity but weak in liquid reserves, this is a common pattern. Savings data bears this out: 55% of Fed respondents had three months of expenses set aside in a dedicated fund, down from 59% in 2021, and 30% said they could not cover three months in any way. A specific number gives you something to work towards.
What the Fed’s Financial Well-Being Survey Can Tell You About Your Planning
The best way to use this report is as a set of questions specific to your own situation, not a summary of what’s happening with other people.
Is your sense of financial stability based on something you’ve tested, or simply based on how things are going right now? How much liquidity do you have relative to the amount of liquidity you’ll need if something goes wrong?
boldin planner Designed for that kind of work. You can adjust income, expenses, timing of retirement, health assumptions, and age at which you can claim Social Security to see how your plan fares under different circumstances, including ones you haven’t thought about yet.
For more information about creating reliable income during retirement, Retirement Income Strategies And How to make your savings permanent There are good places to start.
Most Americans are doing just fine right now. The difficult exercise is to know whether this is true even under pressure. Most people find numbers more useful than the anxiety they replace.