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 working-age 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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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.

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