For decades, retirees were taught to stick to the basics: diversify your assets, invest in blue-chip stocks, buy a few mutual funds, and lean on certificates of deposit for safety. But that old formula is starting to crack under modern financial pressure.
Longer life expectancies, rising inflation, and increasingly volatile markets are exposing the limitations of traditional retirement portfolios—especially for Baby Boomers who now face retirement periods that may stretch 25 to 30 years or more.
“Retirees are realizing the world has changed, but their portfolios haven’t,” said Michael A. Scarpati, CEO of RetireUS, a fintech company that connects individuals with independent fiduciary professionals. “The playbook built for your parents’ retirement isn’t built for the 21st century.”
As Americans live longer, retire earlier, or shift into part-time work later in life, the need for both growth and protection in retirement planning has become more urgent. Yet many investors are still stuck in outdated allocations that may have worked in a different economic era—but not now.
The classic “60/40” portfolio—60% stocks, 40% bonds—has taken repeated hits in the past decade. Inflation has eroded fixed income returns. Market downturns have eaten into equity holdings. Meanwhile, everyday expenses like housing, healthcare, and food continue to rise faster than many retirees expected.
That’s why some retirement experts are pushing for an expanded toolkit that includes less conventional—but more resilient—financial products.
Among the options being recommended:
- Structured Notes, which offer customized risk-return profiles and can provide downside protection with modest growth potential.
- Buffered ETFs, which allow investors to participate in market gains while limiting losses over a specified period.
- Protected Growth Indexes, which tie returns to market benchmarks while including embedded safeguards to cushion against volatility.
“These aren’t exotic investments—they’re just tools that have long been used by fiduciaries but rarely explained to the average retiree,” Scarpati said. “The problem is that many big-box brokerages aren’t incentivized to talk about them.”
According to a 2024 Retirement Readiness Survey by the National Institute on Retirement Security, 62% of retirees say they worry their savings won’t last the rest of their life. The same survey found that nearly half of those respondents had never heard of structured financial products that could help mitigate risk while preserving potential growth.
That lack of awareness, Scarpati says, is one of the biggest threats facing today’s retirees.
“There’s a dangerous gap between the tools that exist and the tools people actually use,” he said. “Most people are flying blind.”
To address this, RetireUS has launched Government Transition Decision HQ, a free crisis-response resource designed to help federal employees and retirees adapt their financial strategies in light of job changes, layoffs, or early retirement. Through educational webinars and one-on-one sessions with fiduciary advisors, the program aims to equip retirees with personalized guidance—not one-size-fits-all advice.
The demand for such help is growing. With recent budget cuts prompting a wave of federal agency layoffs and early retirement packages, thousands of workers are reevaluating their long-term financial strategies on short notice.
The stakes are high: Choosing the wrong drawdown strategy or relying too heavily on outdated vehicles could mean running out of money just when it’s needed most. Financial missteps made during retirement can be particularly costly because retirees no longer have decades to recover from market shocks or poor asset allocation.
Scarpati emphasized the importance of working with fiduciary professionals—advisors who are legally obligated to act in the client’s best interest—rather than commission-based brokers whose advice may be tied to product sales.
“These professionals aren’t selling products—they’re helping you design a strategy that makes sense for your unique situation,” Scarpati said.
As financial markets continue to shift and inflation remains a wildcard, experts say the key to long-term retirement success is adaptability.
“The world isn’t static, and your retirement plan shouldn’t be either,” Scarpati said. “It’s not about chasing returns. It’s about making sure your money works just as hard as you did—without taking on more risk than you can afford.”