12 Retirement Trends: What You Need to Know in 2025
Employees are living longer, working longer, and facing greater financial complexity than ever before. Employers are looking at retirement planning not just as a benefit but as a critical part of overall financial wellness—helping employees secure their futures while strengthening retention and productivity. Here are 12 retirement trends to keep an eye on in 2025:
1. Improved Service, Auto-Enrollment, and Self-Service Tools
Employers are considering services like digital tools and robo-advisors to help participants manage their investments and self-service tools that improve access to plan information. There’s also a trend of more companies turning to auto-enrolling their employees to ensure that they’re taking advantage of the company 401(k) plan.
2. Promoting the Benefits of HSAs
Health savings accounts (HSAs) are becoming an essential part of retirement planning. For employers contending with rising healthcare costs, an HSA paired with a high-deductible health plan could be a cost-effective option to help employees stretch their medical dollars.
3. Enhanced Financial Education for Participants
Consider offering your employees financial education as part of a retirement plan. Resources such as financial counseling, online budgeting tools, and access to professional advice can help employees assess their financial readiness and better prepare for retirement.
4. Offering Retirement Plans as a Part of Overall Financial Wellness Benefits
Employers who integrate retirement plans into a broader financial wellness program can help their employees feel more confident and prepared for the future, combat stresses around money matters, and feel more hopeful for the future.
5. Stronger Auto-Portability for 401(k) Plans
Auto-portability, an optional employer 401(k) plan feature that automatically transfers small-balance retirement savings when participants change jobs, has become increasingly popular.
6. Socially Responsible Investing
Socially responsible investing (SRI) is gaining traction as employees, particularly Millennials and Gen Z, seek to align their investments with their values. These employees are not only looking for healthy financial returns but also want to invest in companies that prioritize environmental, social, and governance (ESG) factors. Offering socially responsible investment options can help employers attract and engage employees who care deeply about the impact of their investments.
7. Older Americans Working Longer Means Fewer “Traditional” Retirements
The average retirement age is increasing, meaning older Americans are working past the typical retirement age. Companies may see long-term effects manifest through pressure for higher pay, labor shortages, and (further down the road) potential Social Security funding problems.
8. Continued Uncertainty About the Future of Social Security Benefits
With projections suggesting that Social Security funds could be depleted by 2033, and that the SSA will not be able to pay out more than 79% of earned benefits beyond then, one of the most questioned developments in retirement is the availability of Social Security benefits. By providing 401(k) plans, matching contributions, and financial education, companies can encourage savings at all stages of employee careers and reducing reliance on Social Security benefits alone.
9. Growth of AI and Digital Tools in Retirement Planning
Artificial intelligence (AI) is transforming how small and medium-sized businesses can offer retirement planning. With AI-assisted platforms, employers may be able to offer tailored retirement advice without needing specialized expertise in-house.
10. Expanded Catch-Up Contributions for Older Workers
Beginning in 2025, employees aged 60 to 63 can make catch-up contributions up to 150% of the regular catch-up contribution limit to their retirement plans. This adjustment will be indexed for inflation starting in 2026, giving older workers a valuable opportunity to shore up their savings as they approach retirement. Additionally, for employees earning more than $145,000 in the prior calendar year, all catch-up contributions at age 50 or older must be made on a Roth account in after-tax dollars.
Employers should be prepared to update their retirement plans accordingly and communicate these changes to help employees take full advantage of their retirement options.
11. Longevity and Financial Preparedness in Retirement Planning
Longer life expectancies mean that employees must plan for a retirement that could last 25 years or more. This highlights the importance of financial tools like annuities or lifetime income products, which can help retirees manage the risk of outliving their savings. 12. Expanding Retirement Plan Access for Gig Workers and Small Businesses State-mandated retirement programs and Pooled Employer Plans (PEPs) are making it easier for employers to support workers in saving for the future. PEPs, which allow multiple employers to pool resources and offer a retirement plan with reduced administrative burdens and fiduciary risks, are becoming increasingly popular for small businesses. Together, these developments ensure that a broader range of workers, including freelancers and contractors, can build retirement savings.
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