Employees perceive themselves as largely self-reliant when it comes to retirement planning. So finds recent research by financial benchmarking firm Hearts & Wallets, cited in BenefitsPro. More than three-quarters of full-time employees currently believe their employer isn’t responsible for their retirement, according to the survey.
Nearly half of U.S. households (48%) disagree with the statement: “‘My employer is responsible for providing for my retirement,’” Hearts & Wallets found. According to BenefitsPro, it isn’t clear whether these results means that employees don’t think their employer should be responsible, or that their employer isn’t accepting responsibility. However, the research reveals an important trend: while most employees don’t expect complete retirement provisions from employers, they do want meaningful support. This dovetails with prior research, which typically finds that employees lean on their employers for help with retirement planning.
Notably, there’s a growing openness to employer involvement. In 2024, nearly a quarter (23%) of full-time employees strongly agreed that employers should play a role in retirement planning—a significant increase from 17% in 2017. This suggests employees are looking for more comprehensive retirement planning support, not less.
Hearts & Wallets also found that employees are placing increasing value on professional financial advice. Between 2017 and 2024, the percentage of full-time employees who “see value” in paid financial advice jumped from 22% to 36%. Even more compelling, reliance on paid investment professionals has grown from 48% to 61% during the same period.
Laura Varas, CEO of Hearts & Wallets, captured this trend: “Consumer empowerment and advice from a paid investment professional may seem contradictory, but they aren’t.” Employees are becoming more self-reliant while simultaneously recognizing the importance of expert guidance.”
In light of the Hearts & Wallets findings, here are some key considerations for employers:
- Focus on asset retention: Employees are increasingly comfortable leaving money in their former employers’ plans, especially as these plans offer more attractive in-plan income options.
- Transparency is key: Trust in workplace accounts has increased from 34% in 2013 to 47% in 2023, driven largely by improved pricing disclosures and communication, according to Hearts & Wallets.
- Don’t overlook generational awareness: Younger investors are particularly focused on retirement planning. Part of this is prompted by having witnessed their parents’ preparation; another aspect is having access to new investment platforms.
The Hearts & Wallets research highlights some cautionary notes, particularly for younger investors. Over one-third of U.S. households under 35 have made options trades, with 30% making 12 or more such trades. Employers and advisors have an opportunity to guide these investors towards more managed, potentially less risky investment products to help grow and preserve their long-term retirement security.
The future of retirement planning is collaborative. Employers are not expected to shoulder the entire burden, but they are crucial partners in helping employees achieve financial security for the future. By offering flexible retirement plan options, transparent communication, and access to professional advice, companies can meaningfully support their employees’ long-term financial goals.
