Financial advisors are mostly bullish on their clients’ retirement readiness and tax burdens in the new year, according to a new U.S. News-AdvisorFinder survey conducted in the fourth quarter of 2025.
However, the sentiment on retirement shifted from a previous survey conducted in the third quarter, when a large majority (72%) said their clients were better positioned to reach their retirement goals. In the most recent survey, only 41% gave this same response, while about 3 in 10 said their clients would be in “somewhat worse” shape for retirement readiness.
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“People are retiring earlier than in the past and living longer, requiring their savings to provide for longer time horizons,” says Brian Berkenhoff, founder of Birch Investment Management in Brookings, South Dakota. “Unfortunately, this is happening at a time when markets are elevated and yields are still historically low. Any significant downturn in the market could drastically affect the ability of retirees to maintain their standards of living.”
The quarterly “Advisor Outlook Index,” conducted by U.S. News & World Report and AdvisorFinder, asks financial advisors to share their predictions on markets, retirement conditions, the tax climate and artificial intelligence. The fourth-quarter survey was conducted between Nov. 5, 2025, and Jan. 13, 2026. Here’s what we learned:
— 41% said their clients would be better prepared to reach their retirement goals. Meanwhile, 29% said their clients would be worse off, perhaps reflecting greater concerns over the long-term viability of Social Security, bond market volatility and Americans’ shorter retirement timelines.
— 47% said their clients would face a lighter tax burden this year. That’s down slightly from close to 50% in the third quarter, but advisors are still optimistic in light of new tax code changes mandated by the One Big Beautiful Bill Act, signed by President Donald Trump last July, taking effect this year.
— Some advisors are wary of sticky inflation and underperforming stocks. Forty-one percent said inflation would rise to 3% or more in 2026, and about 24% expressed a “bearish” outlook on U.S. equities in the new year.
Here are more takeaways from the latest U.S. News-AdvisorFinder “Advisor Outlook Index”:
41% of Advisors Think Clients Will Be Better Prepared to Reach Retirement Goals
Potential cuts to Social Security loom large in the minds of advisors and their clients who are nearing retirement. Payments could be reduced by 24% in late 2032 unless Congress intervenes.
Some advisors are also concerned that early retirees will face higher health care premiums now that key subsidies under the Affordable Care Act expired at the end of 2025.
“Many clients have been retiring early and turning to the marketplace for their health insurance needs until they reach Medicare age,” Berkenhoff says. “With the expiration of the enhanced subsidies, early retirees are facing significant increases to the premiums they need to pay.”
Still, 35% of advisors say their clients will be “somewhat better” positioned to reach their retirement goals in the next 12 months, with 6% saying “much better” and 29% saying “about the same.” Roughly 1 in 3 advisors said the outlook is “somewhat worse.”
“Clients actively engaged in the planning process typically live within their means and avoid behavioral investment mistakes,” says Nate Paulson, CEO and senior wealth advisor at Paulson Wealth in Wheaton, Illinois. “Good habits coupled with the strong returns of the last three years often leave them ahead of their plan to reach retirement goals.”
More Advisors Expect Heavier Tax Burden in 2026
In the fourth quarter, roughly 18% of advisors said they expected evolving tax policies to present a “somewhat heavier” burden on their clients, compared to only 7% who said the same in the third quarter. About 18% said the tax burden would be “much lighter,” 29% said it would be “somewhat lighter” and 35% said they expect “no meaningful change.”
Of course, the biggest factor for Americans filing tax returns this year is Trump’s sweeping tax bill, which passed largely along partisan lines in a Republican-dominated Congress. The bill makes permanent tax cuts enacted during Trump’s first administration, along with other provisions such as a higher cap on state and local tax deductions and a temporary $6,000 deduction for eligible taxpayers age 65 and over.
“The tax bill passed last July was retroactive to Jan. 1, 2025, so it is immediately reducing the tax burden for nearly all clients,” says Paulson. “Eliminating taxes on Social Security was not included. However, the age-based bonus deduction is achieving a similar end, so clients can potentially see a $47,500 standard deduction, subject to age requirements and income phase-out.”
[Read: How to Save and Invest for a Long Retirement]
Most Advisors Expect Inflation to Persist and Stocks to Remain Buoyant
Inflation has come down considerably since the summer of 2022, when the consumer price index, or CPI, soared above 9%. However, it remains well above the Federal Reserve’s preferred target rate of 2%. A large majority of advisors expect this to continue in 2026: About 47% expect the annual rate of inflation to stand between 2% and 2.99%, while 41% said it will rise to 3% or higher.
The CPI rose by 2.7% on an annual basis in December, and it increased by 0.3% month over month. However, some analysts believe the new tax law and the long-term impact of Trump’s aggressive tariffs could send inflation higher this year.
Meanwhile, most advisors we surveyed are sanguine about stocks. A little over 41% said they held a “bullish” view of U.S. equities, and only 24% were “bearish.” The S&P 500 has gained 1.4% so far in 2026, but many investors fear stocks are generally overvalued and that the dominance of mega-cap tech firms with outsized artificial intelligence ambitions portends a stock market bubble.
“Be prepared for volatility as the AI sector stock run-up has gotten pretty frothy,” said one survey respondent. “It could be helpful to take some profits and re-allocate into some of the more defensive sectors.”
Methodology
Data for the U.S. News-AdvisorFinder “Advisor Outlook Index” was collected between Nov. 5, 2025, and Jan. 13, 2026. It included responses from 17 financial advisors in U.S. News’ and AdvisorFinder’s networks. Participants answered 10 questions, which included multiple-choice formats and open-ended responses, focused on client financial stability, practice management and the economic outlook for 2026. Data collection was provided by PureSpectrum.
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Survey: Financial Advisors More Cautious in Client Retirement Outlook for 2026 originally appeared on usnews.com