Employees Feel Optimistic About Retirement, But Their Behaviors Tell a Different Story
The Nationwide Retirement Institute’s fifth annual Protected Retirement Survey Report (August 2025) makes one thing clear: employees often feel confident about retirement, but confidence doesn’t always equal preparation. That disconnect has real implications for a workforce planning and benefit strategy.
Optimism at Record Levels
The survey found 79% of private plan participants and 84% of public plan participants report a positive outlook on their retirement savings and investments — significantly higher than in 2024. Nearly 9 in 10 also say they are confident in their ability to manage investments through market volatility. Despite this optimism, the data reveals real gaps:
- Limited financial literacy. Fewer than half of participants understand compound interest.
- Mismatch in perceptions. Although 76% of private employees say they contribute enough to receive the full employer match, sponsors estimate only 42% actually do.
- Emotional decision-making. Nearly 3 in 10 private participants admit regretting investment choices — buying too high, selling at the bottom or stopping contributions.
These behaviors suggest employees may “feel ready” while lacking the knowledge or discipline for lasting or long-term retirement security.
Potential for Adverse Organizational Impact
Another disconnect with the high level of survey respondent optimism involves the timing of retirement. Nearly one in three survey participants ages 45+ now expect to retire later than originally planned. In addition, 54% of private sponsors and 73% of public sponsors report more employees postponing retirement in the past year. That trend increases benefits and labor costs, lowers morale and slows advancement for younger workers.
Informational Resources: Nationwide Retirement Institute: Protected Retirement Survey Report (August 2025).
Key Takeaways for Plan Sponsors
Employee optimism can mislead both workers and sponsors into a false sense of security. To bridge the gap between confidence and preparedness, sponsors should consider:
- Expanding financial education on financial literacy and financial wellness in general, as well as compounding, employer match and decumulation strategies
- Reinforcing plan features such as auto-enrollment and auto-increase, and exploring in-plan income options
- Providing resources to help employees avoid emotional, short-term decision-making.
Confidence may feel reassuring, but preparation is what ensures retirement readiness. Sponsors who close the gap can improve outcomes and protect organizational health.
