More Americans than ever are expected to reach retirement age in 2025, and according to the latest Fidelity Investments® State of Retirement Planning study, many are experiencing a reality check.

In fact, while two-thirds (67%) of Americans in their planning years express confidence around their retirement prospects, that level is down seven percentage points from last year, with confidence down due to the lingering impact of inflation and the cost of living.

Similarly, although more than 70% of recent retirees say retirement is going as planned, many have been caught off guard around rising costs, particularly healthcare expenses. The study, which has been conducted since 2019 and examines how people are viewing and planning for retirement, focused this year on individuals approaching retirement as well as those recently entering retirement, to compare expectations against reality.

“Notably, the current generation of retirees could be the last to use predictable sources of income such as pensions as the primary way they fund retirement," said Rita Assaf, vice president of Retirement Offerings at Fidelity Investments. . "The shift toward relying on retirement savings heightens the importance of grounding yourself in a financial plan as early as you can.”

Despite a challenging stretch—including a global pandemic, periods of market uncertainty, and high inflation—most recent retirees are currently quite positive about their present financial situation: 72% said  their retirement is going as planned; 70% said they have saved and planned appropriately for a comfortable retirement; and 69% said retirement is more enjoyable than they expected.

However, more than half (57%) of those who did not plan for healthcare costs said those costs are higher than they anticipated, and 43% feel Medicare covers less than they thought. These and other insights about both retirees and pre-retirees are provided in the full report.

To download the report, click here