Plan Sponsors Doubt Employee Retirement Readiness at Unprecedented Levels

Nearly two-thirds (64%) of workers feel on track with their retirement savings, but there is a record gap between their confidence level and that of their employers, according to BlackRock’s 2025 Read on Retirement survey, published Monday.

Only 38% of employers surveyed reported they believe at least 60% of their employees are on track with their retirement savings, a record low since BlackRock began its survey in 2016. Meanwhile, savers’ confidence is up 23% over the same period.

“A decade of insights on retirement readiness data reveal a striking paradox,” said Jaime Magyera, head of BlackRock’s U.S. wealth business, in a statement. “While saver optimism about retirement is rising, employer confidence and actual savings contributions are falling—highlighting a disconnect between how prepared people feel and how prepared they likely are.”

This year, retirement confidence dipped slightly from last—by four percentage points—presumably due to market volatility. Economic uncertainty has contributed to a decline in saving rates this year, to 10% from 12% in 2022. However, long-term market growth and the entrance of new cohorts into the workforce have buoyed savings confidence over the past decade.

Demographics Gaps

According to BlackRock, younger generations have fueled the 23% growth in confidence. Generation Z respondents (described as about age 25) were 76% confident in their retirement savings, compared with 59% of Millennials when they were about the same age in 2016. Millennial respondents now in their “prime earning years” (about age 35) shared 70% confidence—yet Gen X respondents reported only 43% confidence at the same age.

Closer to retirement, data show that confidence typically evens out. Generation X respondents (about age 45) had the same level of confidence (54%) that Baby Boomers showed in 2016.

A gender gap in retirement confidence also persists, but women have made strides. The survey showed that confidence has increased evenly by 22% since 2016. In the most recent survey, 84% of men reported confidence that they will have enough savings to last through retirement, while 74% of women reported confidence.

‘A Saving Culture’

BlackRock also tracked how today’s “saving culture” helped retirement confidence reach its current levels.

The survey revealed results of a known trend in the retirement industry, bolstered by automatic enrollment provisions mandated by the SECURE 2.0 Act of 2022, which builds on the Setting Every Community Up for Retirement Enhancement Act of 2019: that workplace savers are embracing automatic features. Seventy-eight percent of savers surveyed said they wanted to be auto-enrolled in savings features, up from 65% in 2019, and 72% wanted their savings rates to automatically increase each year.

Target-date funds also continue to see demand grow: 75% of savers said it would be helpful if their plan automatically reallocated their assets based on age, like a TDF would, up from 65% in 2019, and 91% of surveyed retirees found TDFs appealing, saying they wished they had access to them.

Demand for guaranteed income has spiked over the last six years, which the survey attributed to workers’ fears of outliving their savings: 86% of workplace saver respondents said they wanted it this year, up from 19% in 2019.

Along the same lines, 66% of savers surveyed said they worry they will run out of money in retirement—a six-percentage-point increase from 2024. Only 27% of retirees said they feel confident they had enough saved to last them through retirement, and 91% said they believe employers should provide guaranteed income in their retirement plans.

BlackRock found retirees want more reliability, as well: 35% of those surveyed said market volatility has negatively impacted their confidence, up from 30% who said so in 2024. Twenty-eight percent were worried about their ability to maintain a steady monthly income, up from 16% in 2020.

On the plus side, employers may be listening to workers’ concerns. For the first time in the history of the survey, all responding employers reported feeling responsible for helping participants generate and manage income.

“While employers can’t directly control the markets, they can control access to the tools that can help savers invest better to live better,” the report stated.

Strategies to Close the Savings Gap

In addition to concern about market volatility and reliability, workers reported facing pressure because their emergency savings are dwindling, and their retirement savings may fall short of the median 15% savings rate respondents said is needed to live the lifestyle they want in retirement.

BlackRock identified several measures to mitigate the retirement savings and confidence gaps.

First, 80% of workers surveyed expressed interest in using an actively managed fund for retirement savings, but only 15% were “extremely familiar” with active investment strategies. Meanwhile, 81% said it would be helpful to receive specific education about the investment options available to them.

Additionally, plan sponsors placed their trust in active management strategies: 86% of those surveyed agreed that an actively managed TDF could generate incremental returns for participants, and 80% said active managers could consistently outperform the market. Eighty-three percent agreed that an actively managed TDF could reduce the impact of volatility. Of the 24% who said they would consider adding private assets to their plan, the most popular vehicle choice (39%) was a TDF.

“Savers need their money to work harder—and plan sponsors are feeling the pressure to deliver,” the report stated. “The good news? The tools are already here.”

The survey was executed online by Escalent, an independent research company, from February 2 through March 19 and from April 10 through May 19. The respondents were 459 plan sponsors, 1,300 workplace savers and 300 retirees.