Retirement confidence and ‘the great decide’

Americans are on the precipice of huge financial choices as they prepare for retirement – a phenomenon described as “the great decide.”

But a lack of confidence is keeping Americans from making the choices they need for a successful retirement.

Rebecca Rickert, head of marketing communications and consumer insights for Empower, was among the panelists who broke down the results of the annual Retirement Confidence Survey conducted by the Employee Benefit Research Institute and Greenwald Research.

Research found that Americans’ determinants of financial happiness are receiving failing grades, she said. For example, Americans measured their retirement savings at an average of 4.54 out of 10, and their ability to retire at the goal age at an average of 4.93. Nearly 70% said the economy is too uncertain for them to make big money moves, and more than half believe financial success is further away than it was a year ago. The desire for financial advice was made clear: 6 in 10 said they need advice more than ever, while 78% said having a financial plan made them happier and less stressed.

Younger generations are off to a good start, Rickert said. The average net worth of Gen Z and millennials grew by more than 17% in 2024 compared with 4.6% for millennials and baby boomers. Younger generations stand to inherit $78 trillion, and they will need to make decisions on saving, investing and where to get advice.

Financial professionals were cited by 50% of those surveyed as the most trusted source of good money advice, she said. That was far above social media (10%), artificial intelligence (9%), and influencers or podcasters (7%).

Retirement is a waterfall, not a glide path

Half of workers believe they will gradually transition into retirement, but three-quarters of retirees report they had a full-time stop out of the workforce, said David Blanchett, head of retirement research at PGIM.

“A lot of people think retirement is a glide path, and the reality is like it’s more like a waterfall,” he said.

About two-thirds of retirees left the workforce earlier than they planned because of forces out of their control, he said. The most common reasons for an unexpected exit were health concerns and a change in their employer, such as downsizing, closure or reorganization.

An encore career is the dream of many retirees, but Blanchett said the research tells a different story. Only about 3 in 10 retirees report they have worked for pay in retirement.

Wanting to stay active and involved was the top reason retirees gave for continuing to work, while 4 in 10 said they needed the income to make ends meet.

“Retirement is the most expensive purchase a household makes,” Blanchett said. Working with an advisor can help workers be more confident in that purchase, with 83% of workers who have an advisor reporting they were confident in attaining their retirement goals. About 4 in 10 workers and retirees said they currently work with an advisor. Of those workers who don’t, about half said they expect to work with one in the future.

Confident but concerned

Retirees are more confident in having enough money to live comfortably in retirement than last year, said Lisa Greenwald of Greenwald Research. Retirement confidence went up two percentage points – from 74% in 2024 to 76% in 2025.

But workers and retirees alike are concerned about government changes to the retirement system, she said.

Workers’ biggest concern is that an increasing cost of living will make it more difficult to save for retirement, while retirees’ biggest worry is the U.S. government making significant changes to the retirement system.

Seventy percent of workers said they fear the U.S. will enter a recession in the next 12 months, a feeling echoed by 58% of retirees. Stock market volatility was a concern of 71% of workers and 60% of retirees.

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