It's just speculation because Madrid don't seem to want to be too exposed about who is going to be the coach or the players they are targeting so their news even though there are a lot of rumors but in the end it's like a wind that has no direction because Madrid always has a way of closing themselves about the rumors that befall them.
At the momentMadrid already have some names for coaching candidates but there is still no further information about this and indeed the names Xabi or Nagelsmann are also only a condition which is only based on rumors.
This rumor has been confirmed by several local Spanish media and although the level of truth is still quite questionable because Real Madrid has not made any statement and Ancelotti also does not want to bother with the rumors being reported. However, if you look at Ancelotti's age and his desire to coach the national team, it may be true that in the next few seasons Real Madrid will have to take quick steps as an option if Ancelotti really decides to move. The reason is, no one knows what the coach's fate will be next season and maybe he also intends to train other teams outside Spain.
Xabi and Nagelsmann are considered to be suitable candidates to replace Ancelotti because these two coaches have good abilities when managing the club. If Real Madrid doesn't move quickly then it will be difficult for them to find a suitable replacement when Ancelotti decides to leave because coaching Real Madrid is not easy because this team has a big name and reputation which puts pressure on the coach.