Beyond "survival mode": How to balance today's financial needs with tomorrow's goals

Key takeaways:

• You don’t have to choose between protecting your money today and preparing for retirement. With a thoughtful plan and professional guidance, you can work toward both.
• Retirement planning isn't just about how much you've saved. Understanding how your savings may translate into reliable retirement income is just as important.
• A financial professional can help you create a strategy that is designed to protect what you have while continuing to work toward your long-term goals, even as your life and priorities change.

As costs continue to rise, many Americans find themselves choosing between today's financial priorities and tomorrow's goals.

Nearly three-quarters of consumers (74%) say they're simply trying to stay financially afloat, according to the Nationwide Financial Growth & Protection Index, powered by the Nationwide Retirement Institute®. More than two-thirds (68%) have reduced spending over the past year to improve their financial situation, while 45% have dipped into savings to cover essential expenses.

Yet despite those challenges, people haven't given up on the future. Seven in 10 consumers believe they can significantly improve their financial situation over the next five years, our index found.

Protecting your finances today doesn't have to come at the expense of preparing for tomorrow. A thoughtful retirement plan can help you balance both, giving you a strategy to manage today's uncertainties while continuing to work toward your long-term goals. A financial professional can help you put that strategy into action and adjust it as your needs change over time.

Prepare for the unexpected

Playing defense when it comes to your finances makes sense, especially when costs are rising and the future feels uncertain. Stability and predictability can provide greater financial confidence, so it's natural to want to hold onto what you've already worked so hard for.

But focusing solely on protecting what you have doesn’t necessarily mean you’re prepared for future financial challenges. Just 30% of Americans have taken steps to protect against income loss due to illness or injury, and more than one-quarter (27%) say they wouldn't be financially protected if their household's primary income earner could no longer work, according to our index.

An illness, job loss, or other unexpected expense doesn't just affect your current financial situation. It can interrupt retirement savings, delay your retirement timeline, and make it more difficult to recover financially. Getting back on track often means rebuilding savings while also trying to make up for months or even years of missed contributions. That’s one of the many reasons why it’s so important to plan ahead.

Working with a financial professional can help you think through your near- and long-term financial priorities, so protecting yourself today doesn't come at the expense of the future you're working toward.

Retirement is about more than your savings. It's about your income.

Protecting your financial future isn't only about preparing for unexpected setbacks during your working years. It's also about making sure your savings can provide reliable income when you retire.

It turns out many people are thinking about retirement that way. More than 8 in 10 Americans (81%) say they would prefer a guaranteed, predictable retirement income stream over higher-growth investments. Yet only 24% say they have solutions or strategies in place to help reduce market risk in retirement, suggesting many people value retirement income stability but may not have a plan designed to support that goal.

When you're unclear about how your savings will translate into income in retirement and how you'll make it last, it's often easy to second-guess your retirement plan. You may wonder if you're saving enough, if you're on track to meet your retirement goals, or if you'll have the income you need to support the retirement lifestyle you want.

If you're looking for more confidence about your own retirement plan, it may be worth talking with a financial professional. Understanding how your savings could work alongside other potential income sources can help you feel more confident that you're making the right decisions today for your future.

Simple steps you can take today

You don't have to tackle everything at once. Small, thoughtful steps can help strengthen your financial foundation while keeping your long-term goals in focus.

Shore up your emergency fund.

Building (or rebuilding) an emergency fund takes time, and that's okay. Consistent savings, even in small amounts, can help you prepare for unexpected expenses without losing sight of your long-term goals. Aim to set aside three to six months of essential living expenses such as housing, transportation, utilities, and food.

Consider how your household would handle a loss of income.

How would your household manage if your income dropped significantly or went away entirely? Reviewing your emergency savings, insurance coverage, and monthly expenses now can help you identify areas where you may be financially vulnerable before life throws you a curveball.

Think about how you’ll meet essential expenses in retirement.

Whether you’re saving in a retirement plan at work or on your own (or both), a growing account balance is important. So is understanding how your savings could translate into steady retirement income. Thinking beyond what’s in your retirement account to how you’ll use it to support your lifestyle can help you better prepare for the years ahead.

Finding the right balance.

You don't have to choose between feeling financially secure today and preparing for tomorrow. With thoughtful planning and guidance, it's possible to work toward both.

Talk to your financial professional about building a plan that reflects your goals and priorities.