Most Americans Are Ignoring the One Retirement Risk You Can’t Invest Your Way Out Of
There’s a lot of advice out there about retirement. “Save early. Max out contributions. Diversify your portfolio.” But somewhere between the Roth IRA tips and the warnings about inflation, a big piece of the puzzle keeps getting left out: how people are going to spend their actual time once they stop working.
It turns out that most Americans are planning their retirement like it’s a math problem and skipping the part where they figure out what life will feel like. According to Lincoln Financial’s research, nearly 80 percent of pre-retirees say they expect to use retirement to enjoy hobbies, passions, or long-delayed interests. However, only 11 percent have planned or budgeted for any of it.
Saving for retirement and saving for living through retirement are not the same thing.
The Hobby Gap is Costing People
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Americans have been told to prepare for the worst: market dips, health care bills, rising rent. But what about preparing for the things you’ll enjoy? The idea that you’ll suddenly pick up a guitar, volunteer at the shelter, or garden for hours each day sounds great until you hit retirement and realize you haven’t made space or money for any of it.
You don’t magically become a ballroom dancer just because your calendar is open. Pastimes that involve travel, equipment, or classes aren’t usually cheap. In the Lincoln Financial study, a third of retirees admitted they underestimated how much their hobbies would cost.
Even among people working with financial advisors, only about half had talked about budgeting for activities or personal pursuits. Most are still focused on healthcare costs, taxes, or day-to-day expenses. Yes, they matter, but so does figuring out whether someone can afford to join a tennis league or fly to see their grandkids once a year.
The idea that time equals happiness is a comforting assumption. But time without a plan can quickly become stale.
In a SoFi Retirement Survey of 500 adults, 31 percent said they’d rely on Social Security as their main income source. That could work for a quiet, low-cost life, but for those hoping to pick up new interests, travel, or stay active, it probably won’t be enough.
When Structure Disappears
Another thing is that work schedules shape most people’s lives. The rhythm of alarms, meetings, and deadlines brings order, even if it’s tiring. Once that’s gone, the calendar opens up, and that freedom can feel overwhelming.
More than just your schedule, retirement can shake your sense of self. Many people have built entire identities around their job titles and work habits. The shift in identity is subtle but strong. After all, their job was their main source of confidence, connection, or daily motivation. Take that away, and it leaves a void.
That’s the risk most people never see coming. Building a new identity requires intentionality. That’s why financial planners who push lifestyle conversations see better outcomes.
Different Generations, Same Blind Spots
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Retirement means different things depending on age. Millennials tend to be more confident about their plans; 37 percent say they’re on track or ahead. Boomers are more conservative, with only 22 percent reporting the same. Gen X, caught in the middle, is the least prepared, with a quarter saying they haven’t set goals at all.
Part of this is mindset. Younger adults may be more flexible and comfortable adding freelance work or side hustles into retirement, while older generations often aim for a clean break. But regardless of age, most Americans still haven’t planned how they’ll fill their time.
The solution starts with specificity. Real planning goes beyond investment targets. It means asking what a good week in retirement looks like. Does it involve time with grandkids? Volunteering at the library? Learning a language? Making those ideas concrete helps align financial decisions with real-world outcomes. People who set clear goals are more likely to feel confident, save, and report positive feelings about retirement.
It also helps avoid lifestyle drift. People who don’t define their priorities can end up overspending out of boredom or habit. A detailed plan helps you stick to budgets and adapt more easily to unexpected changes.
Financial Advisors Are Catching On
Financial advisors are starting to change their approach. Some now open meetings by asking clients to describe their ideal day or pick three things they’d like to accomplish in their first year of retirement. Those conversations feel more personal and help advisors build better plans.
Clients who’ve discussed their personal goals, values, and interests are more engaged and more likely to stick with their strategies long-term. And it’s no coincidence that those same clients often report higher overall satisfaction and fewer regrets.