Employees, Plan Sponsors Optimistic About Retirement Planning, but Share Broader Concerns

Employees are more optimistic about their retirement planning this year than they were in 2024, and saying they feel confidence in their ability to manage investments, according to the Nationwide Retirement Institute’s fifth annual Protected Retirement Survey, released on Thursday. 

Despite the optimism, however, nearly one in three participants age 45 and over expected to retire later than originally planned. 

“The survey shows that there is a disconnect between American workers’ confidence in their retirement and their investing behavior,” explains Cathy Marasco, vice president of protected retirement at Nationwide. “It puts some of the data in perspective.” 

Breaking Down Confidence 

Seventy-nine percent of private retirement plan participants and 84% of public plan participants self-reported a positive outlook on their retirement savings—a 14 percentage point increase across both groups from 2024, according to Nationwide. Most participants (52% private and 61% public) also felt more optimistic about their savings and investments than they did last year. 

The share of all employees surveyed who reported feeling on track with their retirement preparedness rose as well, to 71% in 2025 from 65% last year. Private participants’ preparedness rose five percentage points, to 70%, and public participants rose seven percentage points, to 79%. 

“Public sector employees [were] slightly more positive about their savings and were almost 10 [percentage points] more confident,” says Marasco.  

“I could theorize that is because more public sector employees have a pension versus [employees in the] private sectors,” Marasco adds, emphasizing the value of defined benefit plans. 

She says that private sector employees also tend to be more concerned about how market volatility will affect their retirement investments and are more likely to say that emotions influence their decisions. 

But plan sponsors from both sectors overestimated participants’ retirement preparedness when thinking about the average employee at their organization, compared to participants’ views of their own preparedness, the report showed. Seventy-eight percent of private plan sponsors estimated their average employee was on the right track to retirement, down three percentage points from 2024. Eighty-eight percent of public plan sponsors estimated their employees were doing well, down six percentage points from last year. 

Delaying Retirement 

Over the past year, 29% of Nationwide survey respondents over age 45 said they expected to retire later than they had thought they would. Fifty-two percent expected no change in their retirement date, 13% expected to retire earlier and 7% thought they will never be able to retire. 

The firm found over half (52%) of private sponsors and nearly three-fourths (73%) of public sponsors reported an increase in employees delaying their retirement over the past year. Most plan sponsors observed an increase in employees asking for higher compensation and more stable investment options as well as taking loans or making withdrawals from their retirement plans. 

According to surveyed plan sponsors, the most concerning consequences of delayed employee retirements were higher benefit costs and labor costs. More than one-fourth of those surveyed reported worries over high benefit costs, and about one-fifth expressed concern over labor costs. Lower employee morale and fewer advancement opportunities for younger employees were also cited as risks of delayed retirements. 

Marasco says an EY study from 2024 shows just how costly delaying retirement can be. Employer’s cost for delayed retirement was $26,000 per participant for every delayed year, that study found. 

Market volatility concerns were the most frequently cited worries among both groups of plan sponsors, according to the Nationwide survey. Nearly eight in ten sponsors surveyed agreed with the statement “recent market volatility has employees feeling worried about their retirement plans.” Most plan sponsors were “concerned about delayed employee retirements” and agreed with “many employees are delaying retirement due to inflation” and “many employers are delaying retirement due to recent market volatility.” 

Public employers surveyed were more likely than private employers to say that they believe the aging U.S. population will result in higher labor costs. In addition, public sponsors were significantly more likely than private sponsors to offer their employees resources to help plan for occurrences that could impact their retirement readiness, such as inflation (91% public sponsors, versus 65% of private sponsors) and market volatility (88% versus 57%). 

Plan sponsors helping employees delay retirement can consider plan design that provides workers with stability and predictability, such as lifetime income options, Marasco says. In light of the recent Department of Labor advisory opinion affirming that AllianceBernstein L.P.’s Lifetime Income Strategy can be classified as a qualified default investment alternative under the Employee Retirement Income Security Act, there could be a greater adoption of annuity products, she says. 

“It really is a shared responsibility,” Marasco says. “Employers must evolve their plans, advisers should champion access and workers need to stay engaged.” 

Nationwide’s survey was conducted online between July 30 and August 13, among 2,000 private plan participants, 200 public plan participants, 500 private plan sponsors and 100 public plan sponsors.