2025 DC Retirement at a Glance

1. NEARING 90% — PSCA’s annual survey found that the percentage of eligible employees who contributed to their 401(k) accounts increased from 86.9% to 87.4%. While participation rates increased, the average employee contribution rate dropped from 7.8% down to 7.7%, and the average employer contribution rate fell from 4.9% to 4.8% for a total savings rate of 12.5%. (Source: Plan Sponsor Council of America)

2. GRADUAL, OR ALL AT ONCE? — When it comes to Roth IRA conversions before retirement, researchers found that for accounts with a $1M balance, a one-time Roth conversion yields the best final balance, with an average difference of $110K over a 10-year period compared to staying in a traditional 401(k) or IRA and making required minimum distributions. (Source: WSJ)

3. HEADS YOU WIN, TAILS YOU WIN — On 10/27/25, Democratic lawmakers introduced “The Boosting Benefits and COLAs for Seniors Act.” The bill’s purpose is to increase Social Security benefits to account for rising health care costs by tying annual COLA adjustments to the change in either the “CPI for Urban Wage Earners” (the current method) or the “CPI for the Elderly,” whichever is greater. (Source: ThinkAdvisor)

4. OPTIMISM UP, RETIREMENT DELAYED — Seventy-nine percent of participants in private retirement plans feel somewhat (40%) or very (39%) positive about their retirement plans, which is up 14 percentage points from 2024. Despite this optimism, 29% now expect to retire later than planned a year ago, while only 13% expect to retire earlier. (Source: Nationwide)

5. HIGH INCOME, HIGH SPIRIT — Forty-nine percent of US adults over 65 say they are aging extremely well, but perceptions vary based on income. Among respondents with family incomes greater than $156K, 73% have positive views of their mental health and 49% have positive views of their physical health. In comparison, just 45% and 26%, respectively, for adults in the lower income tier with incomes below $52K report positive views of their mental and physical health (Source: Pew Research)

6. RESTLESS RETIREMENT — Forty-two percent of retirees say their financial situation is at least comfortable in retirement, but 16% are “struggling,” and another 3% are “living a nightmare.” Only 40% of retirees believe they have enough money for retirement, and 25% say they have lost sleep worrying about their financial situation. (Source: Schroders)

7. WOMEN TURNING DOWN RETIREMENT — A Goldman Sachs survey of Americans with over $1M in assets found that 18% of women have no intention of retiring, compared to just 11% of men. Female respondents also tended to be more conservative, allocating 40% of their portfolios to equities compared to 45% for men, while having higher allocations to cash and fixed income than their male peers. (Source: Fortune)

8. ANNUITIES DEFY THE ODDS — US annuity sales in Q3 increased 4% year over year to a record $119.3B, marking the eighth consecutive quarter that sales exceeded $100B. For the first nine months of 2025, total annuity sales also increased 4% year over year to a record $345B. Annuities linked to indexes increased to a record $20.6B in Q3, up 20% year over year. (Source: LIMRA)

9. TARGET DATE FUNDS ARE POPULAR, JUST NOT IN RETIREMENT — As the default investment option in many employer retirement plans, assets in target date mutual funds and collective investment trusts increased 10% in the first half of 2025 to $4.4T. Despite the ballooning assets, however, a study from Allspring found that 84% of near- retirees prefer other investment options over target date funds. (Sources: Investment News and Morningstar)

QUESTION: Falls are the leading cause of fatal and non-fatal injuries among adults in the US over the age of 65, with an estimated cost of over $80B annually in medical costs related to non-fatal falls. How effective were fall prevention programs in reducing the number of falls and ER visits?

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.

Distributed by: U.S. - MFS Fund Distributors, Inc., Member SIPC, Boston, MA.

Please note that in Canada this document is intended for distribution to institutional clients only. Note to readers in Canada: Issued in Canada by MFS Investment Management Canada Limited.

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