2025 DC Retirement at a Glance

1. MILLION-PLUS MILLIONAIRES — Average IRA and 401(k) account balances custodied at Fidelity increased by 8% in Q2 to $131.4K and $137.8K, respectively. The combined employer and employee contribution rate during the quarter was 14.2%, and the number of IRA and 401(k) millionaires also increased 16%, to a combined 1,096,481. (Source: Fidelity)

2. EMPLOYER-EMPLOYEE DISCONNECT — 78% of US employers believe their workers are at least somewhat prepared for retirement, compared to just 45% of employees. 63% of employers also report that they speak with employees about retirement preparedness, but 71% of workers say their employer has never asked. (Source: PNC Bank)

3. EXPLAIN IT AGAIN? — 38% of US adults are confident or very confident in their knowledge of Social Security, but just 21% were able to accurately identify the age at which they’re eligible to receive full benefits. Additionally, when given a 15-question true-false quiz about Social Security, the average adult was only able to answer eight questions correctly. (Source: Nationwide)

4. PRIVATE ASSETS IN THE 401(K) FRAY — 45% of 401(k) participants said that they would be interested in private equity or private debt investments if offered the option. Of those investors, 77% would increase their overall contribution rate into their retirement plan, and 51% would allocate less than 10% of their savings to private investments. (Source: Schroders)

5. AN ALTERNATIVE — 24% of retirement plan sponsors are considering adding alternative assets to their employee retirement plans. Of those surveyed, 39% indicated that the primary method they would use to incorporate these assets is through target-date funds. (Source: BlackRock)

6. A THIRD OF THE FAMILY’S WEALTH — For the median American family, a CBO study found that the present value of their future Social Security payments would account for one-third of their average total wealth ($504,000). For families in the bottom 50% of the wealth spectrum, Social Security payments equal 40% of their total assets. (Source: New York Times)

7. SAVE THE TREES — The Improving Disclosure for Investors Act of 2025 is a bipartisan bill that would direct the SEC to allow financial firms to deliver regulatory documents to investors electronically as a default method. 88% of fund investors support e-delivery of regulatory documents as the default option. Even among investors 65 and older, 87% support e-delivery default. (Source: Investment Company Institute)

8. TAX HEALTH INSURANCE? — If the Federal government added employer-sponsored health insurance to the Social Security taxable wage base, the average tax per worker would increase by about 7% (~$420). The added revenues would provide an additional $70 billion for Social Security and cut the 75-year deficit by 25%. (Source: Center for Retirement Research)

9. TARGETING INCOME STRATEGIES — The combined total of assets in mutual funds and collective investment trusts (CITs) dedicated to target date strategies increased 10% in the first half of 2025, rising to $4.37 trillion. One of the fastest growing segments of target date strategies is funds with built-in income features. Total assets in these types of strategies rose by 24% to $103 billion. (Source: Investment News)

QUESTION: A 2025 survey from Nataxis of more than 7,000 workingage adults around the world found that 46% say it would take a “miracle” to retire securely. For American workers specifically, what percentage are praying for a retirement miracle?

*According to PEW Research, the Sandwich Generation consists of adults who have a living parent age 65 or older and are either raising a child under age 18 or supporting a grown child.

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Note to readers in Canada: Issued in Canada by MFS Investment Management Canada Limited.