US Snapshot

Despite market swings and mounting economic uncertainty, American workers are largely holding onto retirement optimism. But our latest research suggests that sentiment alone won’t secure the future many envision.

Rethinking Retirement for the Road Ahead

In our latest study of American defined contribution plan participants, conducted in April 2025, optimism held surprisingly steady, dipping only slightly since our December 2024 study. But the data reveal a telling disconnect between how people feel about retirement and how prepared they are to achieve it.

As Americans get closer to retirement, concerns about inflation, healthcare costs, and financial planning grow louder. Closing the confidence gap — between aspiration and readiness — will take collaboration, education, and a commitment to ensuring access to a dependable income stream.

Perception vs. Reality: The Partial Retirement Pivot

At first glance, the steady optimism many Americans express about retirement is encouraging. And, the jump in confidence since the 2020 Global Retirement Reality Report is notable. But dig a little deeper, and a more nuanced picture begins to emerge, one that suggests confidence may mask some hard financial truths.

Since our December 2024 survey, there has been an eight percent decrease in respondents planning to retire before age 65. Conversely, the number of workers expecting to retire between ages 65 and 69 has increased by four percent, as have those anticipating retirement at age 70 or older.

Recent market volatility may be a factor as over a third of survey respondents said they have revised their retirement plans in the last six months. When asked about the nature of these changes, 33% now intend to retire later than initially expected, while 30% plan to partially retire. This number increases for those approaching retirement age.

While for some, this shift may be driven by changing lifestyle preferences or a desire to remain engaged, it also raises a critical question: can they actually afford to stop working?

While the current market environment may be influencing these decisions today, data suggests this trend has been developing for several years. According to the US Bureau of Labor Statistics, the workforce aged 65 and older has grown significantly faster than the overall labor market over the last decade.¹

For many, inflation, rising healthcare costs, and concerns about income sustainability in retirement are influencing the timeline — and the terms — of their retirement. Partial retirement, then, becomes less of a preference and more of a coping strategy. And it highlights the gap between what people hope retirement will look like and what their financial reality will allow.

Barriers to Confidence: What’s Undermining Retirement Readiness?

For those approaching retirement, optimism often gives way to more grounded concerns. Financial confidence begins to erode as people near the transition, with a marked decrease in confidence occurring around age 45.

Many point to a common set of challenges: inflation, the rising cost of living, healthcare expenses, and uncertainty about the broader economy. These aren’t just back burner worries —they’re central to how individuals assess their ability to retire securely.

Healthcare looms large, especially in the US, where out-of-pocket costs can be unpredictable and burdensome. Inflation has become a defining pressure point. It not only erodes savings in real terms but also casts doubt on long-term income strategies that once felt solid.

In addition to economic considerations, the confidence level of savers is hampered by a lack of knowledge, from not feeling financially knowledgeable to not knowing how much savings they need. This makes it even more imperative for plan sponsors and advisors to help with education, support, and innovative retirement strategies — like simple solutions to turn saving into spending and professionally managed investment offerings.

What’s striking is how consistent these concerns are — across age brackets and borders. Similar sentiment emerged in our Global Retirement Reality Report, revealing that retirement anxiety isn’t just a local issue, but a global one. Regardless of geography, today’s workers are confronting a new retirement reality: one where traditional assumptions may no longer hold, and where confidence alone isn’t enough to ensure long-term security.

Who Feels Ready for Retirement and Who Doesn’t?

When it comes to retirement confidence, age and gender tell a vital part of the story. As noted above, our survey shows younger adults, particularly those aged 18 to 34, remain the most optimistic about their retirement prospects. However, they also experienced the biggest decline in optimism across all ages since our December 2024 survey — a signal that even this group is not immune to shifting economic winds or growing uncertainty.

Gender plays a role as well. Men report significantly higher levels of confidence about their financial future than women. The reasons behind this gap are complex, but a few factors may be at play: women are more likely to take career breaks for caregiving, which can impact earnings and savings. Also, they tend to live longer, increasing the need for sustained income in retirement. Finally, many report feeling less knowledgeable about financial matters.

These structural and social dynamics may help explain why women continue to feel less prepared, despite sharing many of the same financial goals.

Finally, those surveyed who invest outside their workplace retirement plans are far more confident than those who don’t — with optimism jumping from 35% (all) to 43%. On the other hand, for those who don’t have investments outside of their work retirement accounts, optimism drops to 24%.

While this could be simply a matter of having accumulated more wealth in the investment markets, it also speaks to a level of comfort with investment concepts and the advantages of long-term savings — underscoring the need for better participant education.

Understanding these disparities is critical for closing the confidence gap. Increased support – especially for mid-career workers and women – could go a long way in turning retirement optimism into readiness.

The Retirement Income Challenge

Respondents know they’ll need income in retirement. But they don’t know how much they’ll need to save during their working years in order to generate sufficient levels of income in retirement.

Workers are reliant on their employers and financial advisors for the tools and resources they’ll need to help them get to where they want to be. Indeed, the majority of those surveyed (55%) reported they’d be likely to keep funds in their existing employer plan if it offered a structured retirement income solution. And, a third consider being able to easily turn their retirement savings into spending a top priority.

When asked what they expected their primary source of income in retirement to be, 401(k) was the top response, with the exception of the 65+ group, whose top income source is Social Security. Younger generations are relying less on Social Security and looking at a broader range of income sources, but still cite their 401(k) as their expected main source of income.

This uncovers an opportunity for plan sponsors and advisors to begin offering targeted guidance and support — and a robust retirement income plan — for younger workers earlier in their retirement journey.

Those with both a defined benefit (DB) and a defined contribution (DC) plan report higher levels of optimism than those with just a DC plan, perhaps given the security associated with the steady, predictable stream of income that a DB plan provides.

Retirement Savers’ Investment Priorities

In order to seamlessly turn savings into spending — or investments into income — workers say their top two priorities are maximizing returns and minimizing costs and fees. Respondents also cite interest in investments that are appropriate for their circumstances, managed by experts, and that provide access to private markets.

These responses speak to the need for age-appropriate asset allocation, fiduciary responsibility, and an expanded set of investment opportunities that could ultimately translate into dependable retirement income. Financial advice is also a critical component of retirement success. Those who work with a financial advisor are more optimistic than those who don’t.

There may be a gap to bridge here too: Of those choosing not to work with a financial advisor, many report they can manage on their own. However, the same group also said they don’t know how to generate consistent income throughout retirement, and that they were worried about outliving their savings or not being able to cover significant unexpected medical costs.

Closing the Retirement Confidence Gap Together

Retirement optimism among American workers may be holding steady, but confidence alone won’t carry people across the finish line. As the realities of inflation, healthcare costs, and longer life expectancy weigh more heavily — especially those nearing retirement — the need for dependable income, access to investment options, and advice has never been clearer.

While we don’t know when SECURE 3.0 might be enacted or what it will include, SECURE 2.0 included provisions that could help address some of the concerns:

• Increased catch-up contributions to $10,000 or more for ages 60-63, which could help address the decline in optimism seen in those nearing retirement
• Providing two Emergency Savings Options: a tax contribution option and a Roth contribution
• Permitting employers to make matching contributions for workers paying off student loans, which could help with debt concerns and give those early in their careers a head start on saving.

What Plan Sponsors and Advisors Can Do Now to Bridge the Gap

• Leverage new technology. As technology continues to evolve, it can be an effective way to reach participants. And artificial intelligence could help provide advice at scale: 29% of respondents are open to receiving AI-generated advice, and an additional 25% are open to this channel if monitored by a real person.
• Targeted, timely participant outreach. Understanding the different concerns facing participants at different stages of their journey can help inform relevant communications. And don’t forget that they may need additional support in times of uncertainty.
• Connect the dots between benefits. Employees’ financial, physical, and mental health are all connected. A seamless, comprehensive wellness program can help participants improve their financial health. 

This is where partnership makes all the difference. We work closely with plan sponsors, advisors, and institutions to help address the evolving needs of today’s workforce. From a pioneering range of investment options, to offering solutions designed to support income throughout retirement, our mission is rooted in a simple belief: everyone deserves the opportunity to retire with dignity and confidence.

Discover how we can work together to help close the gap between aspiration and achievement — and build a more secure future for today’s retirement savers.

About This Survey

Our global online survey, conducted during April 2025 with international data analytics firm YouGov, engaged a total of 4,371 individuals participating in workplace-sponsored savings plans (or the market equivalent) in Canada, Australia, Ireland, the UK and the US. Surveyed countries represent a range of retirement systems. Gender, age, and regional quotas were balanced to reflect employed populations within each country.