Amid today's economic challenges, American workers are showing remarkable confidence in their long-term financial and retirement plans, according to the fourth annual Protected Retirement survey from the Nationwide Retirement Institute^®. More than six in ten (65%) of workers say they are on the right track when it comes to financial preparedness for retirement; this figure rises to 71% for 22-34-year-olds, a 15-point increase from 2023.

After months of strong stock market gains, the survey found that this improvement is largely due to the active engagement of employees in managing their retirement accounts. Most workers (76%) check their balances at least once a month and 3 in 10modify their contributions or rebalance their investments monthly.

In addition to growing optimism around their retirement finances, employees increasingly think about their retirement savings in terms of the monthly income it will provide in retirement (59%) rather than a total savings balance (26%). They are also embracing new solutions to create steady income in retirement. Nearly two in five (37%) of employees 45 or older are now aware of guaranteed income options within 401(k) plans, a significant 20-point increase since 2023.

To enhance and maximize their savings, employees are asking for automatic features that simplify retirement planning, reflecting a shift in how people think about retirement savings – from a mere nest egg to a crucial element of financial security in retirement. For example, 73% want their workplace retirement plan to include an automatic way to convert their assets to a stream of income in retirement, a number that rises to 77% for employees aged 45 and older.

"I'm thrilled to see that retirement plan participants are viewing 401(k) plans as so much more than just a savings vehicle by thinking about them as a comprehensive tool to help prepare for and live in retirement." said Cathy Marasco, vice president of Protected Retirement solutions at Nationwide. "In this new era, it's crucial that we meet employees where they are with the right education and solutions to help them achieve financial security in retirement."

Despite increased optimism, 56% of employees continue to worry about outliving their retirement income and many (61%) find it challenging to determine how long their savings need to last. Inflation and the high cost of living continue to weigh on workers, with 80% of both public and private sector employees expressing significant concern.
Because of this, nearly one in three employees 45 or older (28%) now expect to delay retirement due to insufficient savings.

Lingering Employee Anxieties Highlight Need for Action

These anxieties reveal critical gaps in retirement planning that need to be addressed by employers, employees, and financial professionals.

Employers have a critical role to play in offering employees not only resources and information about retirement planning but more importantly, simple, automated guaranteed income solutions. Failing to meet these needs can lead to more delayed retirements, negatively affecting the organization's financial performance and the onboarding of new talent. For example, 47% of private sector employers say that delayed retirement makes their health and benefits plans more expensive, 35% say delayed retirement impacts their ability to promote younger talent, and 26% have noticed lower productivity levels.

Employees should actively engage with their employers to understand their financial options and advocate for access to guaranteed income solutions—an investment choice that appeals to two-thirds of workers.

Financial professionals also play a crucial role in educating employers about guaranteed income solutions and making sure that plan participants have access to these useful retirement tools. Most employers are interested in including guaranteed income options in target date funds (85% of private and 91% of public employers) or managed accounts (81% of private and 87% of public employers), representing a significant opportunity for financial professionals to help plan sponsors fill this gap for their employees.

A Call to Action: Securing the Future of Retirement

As retirement planning continues to evolve, it's evident that the future of long-term financial security involves guaranteed income solutions and automatic features within retirement plans. Now is the time for all stakeholders—employers, employees, and financial professionals—to act decisively.

"While education is helpful, survey respondents told us they want solutions that make it easy. We've found that automatically enrolling participants and automatically increasing contributions lead to significantly better outcomes for participants," added Cathy Marasco. "The next opportunity is to enable automatic income in retirement with protected retirement solutions—and that's not just a nice-to-have. It's a necessity to help ensure that participants can retire with confidence and security. Employers and financial professionals must prioritize these solutions, and participants should actively seek them out to help secure a stable financial future."

More information about Nationwide's protected retirement solutions:

• For financial professionals
• For plan sponsors

While broadly known as a leading personal lines property and casualty insurance company, Nationwide is so much more than just a great home and auto insurer . The company has quietly grown into a financial services powerhouse with a broad portfolio of solutions to help Americans achieve a secure financial future, as well as financial solutions for businesses. Nationwide is the No.1 writer of 457(b)retirement plans, company-owned life insurance and universal life, with top ten rankings for linked benefit long-term care insurance, traditional variable annuities and fixed indexed annuities¹. Nationwide is a leader in the industry with a suite of Protected Retirement solutions to help defined contribution plan participants convert their savings into lifetime income. The company is also the nation's No. 1 agribusiness insurer ¹; a leader in excess & surplus lines and standard business insurance as well as a top pet insurer.