The True Meaning of Retirement Confidence

In a recent survey, 78% of retirees say they’re confident they will have enough money to live comfortably throughout retirement. ¹ But what does retirement confidence really mean?

Retirement confidence reflects an individual’s belief that they will have enough money to support a fulfilling life in retirement. As a result, it can be highly subjective. For example, despite high levels of confidence reported by survey participants, many remain concerned about inflation, rising health care costs, and the future of Social Security. ²

Moving from “concerned” to “confident” requires a clear understanding of how the assets accumulated during your working years can be used to produce your monthly income in retirement. This includes understanding the impact of taxes on your income and how your strategy may weather potential market, economic, or lifestyle changes.

That’s where an experienced financial professional can help. With access to specialized financial software, financial professionals can use simulations to stress test strategies across thousands of potential scenarios, in order to generate a “confidence score.” Your individual score reflects the probability—based on certain assumptions—that your strategy will support your target lifestyle goals in retirement. Scores are typically expressed numerically from 0 to 99. 

However, your score is not an end in itself. Probability modeling can be used on an ongoing basis to help determine how changing circumstances and conditions may influence the likelihood of meeting certain goals, which might lead to a higher or lower confidence score over time. For example, an unexpected windfall from an inheritance or the sale of real estate may positively impact your score, whereas a sudden increase in spending due to unanticipated healthcare costs could have the opposite effect. Modeling can also measure the potential impact of actions like reducing spending during a market downturn, allocating a larger portion of portfolio assets to growth stocks, or helping fund a new grandchild’s future education needs.

While retirement confidence scores cannot guarantee specific results, including how long income may last in retirement, analyzing the probability of success allows people to make informed decisions about their spending and investment strategies that may help them remain on track toward their goals.

To learn more about ways to gain confidence in your retirement, contact my office to schedule a time to talk. 

^{1) “2025 EBRI/Greenwald Retirement Confidence Survey.” 24 APR 2025, EBRI.org, https://www.ebri.org/docs/default-source/rcs/2025-rcs/2025-rcs-release-report.pdf?sfvrsn=f5e3042f_3.}

^{2) Ibid.}