2025 DC Retirement at a Glance

1. LIBERATION DAY WRECKING BALL - To start 2025, state and local pension funds had an average funding ratio of just 80.2% (80% is considered ‘adequate’). In the four trading days after President Trump’s Liberation Day ceremony through 4/8, the top 25 US state and local pension funds collectively lost $169 billion, taking their YTD losses to $249 billion. (Source: Pension & Investments)

2. HESITANCY TO SPEND - Americans over 50 spend roughly 80% of income received from lifetime income sources such as annuities, but spending from wage and capital income was less than 50%. Experts suggest that retirees can comfortably spend 4% of their savings each year, but the actual spending rate from savings was just 2.1%. (Source: Retirement Income Institute)

3. ROTHS ARE A YOUNG THING - 33% of all US households own at least one traditional IRA account compared to 26% with a ROTH IRA. Among Gen Z households (age 13–28), twice as many (25%) have a ROTH account versus a traditional account (12%). In Baby Boomer households (age 61–79), though, 46% have a traditional account, nearly double the 24% with a ROTH account. (Source: Investment Company Institute)

4. BOOSTED BALANCES - The average 401(k) account balance at Fidelity increased 11% in 2024 to $131,700, and the average annual 401(k) contribution was $13,570, consisting of an average employee contribution of $8,800 and $4,770 from the employer. In 2024, 39.1% of participants increased their contribution rate, while just 8.6% maxed out their contributions. (Source: Fidelity)

5. SAVINGS GAP - The average expected amount of savings needed for a secure retirement is $2.089 million, but only 18% of Americans are confident that they will have enough money during their retirement years. One-third have zero retirement savings and 69% have less than $150,000 saved. (Source: BlackRock)

6. ANNUITY DISCONNECT - Financial professionals say that 78% of their clients had negative perceptions of annuities even though 73% say annuities help them retain client assets. 91% of financial professionals believe that annuities help to protect against market volatility while 86% believe they improve diversification. (Source: Pew Research)

7. KEEPING CONSOLIDATED - In a study covering 2.3 million retirement plan participants, researchers found that people in their 20s were nearly twice as likely to hold only one fund in their retirement account (70.8%) than people in their 50s (38.5%). Participants in their 20s held an average of 1.95 funds compared to an average of 2.99 for those in their 50s. (Source: Public Retirement Research Lab)

8. COVID’S IMPACT ON SOCIAL SECURITY - Excess mortalities from the COVID-19 pandemic had a net impact of reducing future Social Security payments by $156 billion. Future retirement ($219 billion) and disability ($6 billion) payment reductions of $225 billion were offset by a $44 billion decline in Social Security tax payments and $25 billion in payments to surviving spouses and children. (Source: NBER)

9. VARIED TDF HOLDERS - Adoption of Target Date Mutual Funds varies widely with age. Retirement plan participants between the ages of 25 and 35 collectively have over 45% of their assets allocated to TDFs, while plan participants over the age of 50 have less than a quarter of their plan assets in TDFs. (Source: Public Retirement Research Lab)

QUESTION: Americans can start receiving full Social Security retirement benefits once full retirement age is reached. Those born in 1960 or later are eligible to start receiving full benefits at the age of 67. What age does the average American say is the “best age” to retire?