2025 DC Retirement at a Glance

1. BLESSING OR BURDEN – The number of Americans living to the age of 100 is expected to quadruple over the next 30 years, but 29% of Americans don’t want to live that long, and more than half would consider it a burden versus a blessing. Of those that consider it a burden, over 80% cite fears of losing independence. (Source: Nationwide)

2. FEELINGS, NOT FUNDING – Just over half (51%) of financial planners say that their clients are “very prepared” for retirement. However, when it comes to adjusting to life in retirement, only 11% felt that their clients were emotionally prepared for the adjustment. (Source: Journal of Financial Planning)

3. UNTIL DIVORCE DO US PART – Since 1990, the percentage of US adults ages 65 and older who were widowed declined from 35.3% down to 20.9%. Over that same period, the percentage of adults 65 and older who were divorced nearly tripled from 5.2% up to 15.2%, and 10% of all US divorces now include at least one person 65 or older. (Source: Bowling Green)

4. OLD ENOUGH TO SERVE AND SAVE – On 5/12, Senators Bill Cassidy (R-LA) and Tim Kaine (D-VA) re-introduced the “Helping Young Americans Save for Retirement Act.” Originally introduced in November 2023, the bill would lower the minimum eligibility age for 401(k)s and other workplace retirement plans from 21 down to 18. (Source: Kiplinger)

5. RUSHING TO RETIRE – Claims for Social Security retirement benefits are on pace to increase 15% in 2025 compared to 2024, representing a five-fold increase from the 3% average increase over the last 12 years. Officials say that “fear mongering has driven people to claim benefits earlier.” (Source: New York Times)

6. BRIDGING THE RETIREMENT GAP – 20 states have enacted auto-IRA programs or similar state-run programs, providing a retirement savings option for the 56 million private sector employees in America that don’t have access through their employer. As of April, more than a million Americans were participating in one of these plans. (Source: AARP)

7. RETIREMENT IS PRIVATE – 401(k) record-keeping firm Empower announced on 5/14 that it would start allowing private credit, equity and real estate investments in the 19 million retirement accounts it administers. Empower said that five employers have signed on to the plan, and the funds offered will likely charge annual fees of 1.0% to 1.6%. (Source: WSJ)

8. NOTHING LIKE A GUARANTEE – 74% of workers would be interested in a workplace retirement plan that offers an allocation to a guaranteed lifetime income product (GLIP) as a default investment option. One-third of retirees use a GLIP as a source of income, but 55% of workers expect to use one in retirement. (Source: Employee Benefit Research Institute)

9. RISKIER BUSINESS – As equities outperformed bonds over the last ten years, the equity allocation of target date mutual funds (TDFs) for workers just starting their careers has increased from 85% to 92%, and the average allocation to equities has increased across the entire TDF glide path relative to where it was ten years ago. (Source: Morningstar)

QUESTION: The minimum age that individuals can start claiming Social Security Benefits is 62, but the monthly payment is 30% less than if they take at the age of 67. If an individual takes at 70, how much higher would their monthly payment be compared to if they claimed at 62?

Keep in mind that all investments, including mutual funds, carry a certain amount of risk including the possible loss of the principal amount invested. 

These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any other MFS investment product. No forecasts can be guaranteed. Past performance is no guarantee of future results. 

MFS^_® does not provide legal, tax or accounting advice. Clients of MFS should obtain their own independent tax and legal advice based on their particular circumstances. This has been provided for informational purposes only, and reflects the current opinion of the author, which is subject to change without notice, as are statements of financial market trends, which are based on current market conditions. Past performance is no guarantee of future results. Integrated Retirement is not affiliated with MFS Investment Management^_® or any of its subsidiaries.