According to Charles Schwab’s annual nationwide survey of 401(k) plan participants, retirement savings confidence is down as inflation continues to top the list of obstacles to reaching a comfortable retirement (57%). One-third (34%) of participants feel very likely to achieve their savings goals, down from 43% in 2024. Despite financial pressures, 401(k) investors are prioritizing their nest eggs. Only 11% say they have reduced their 401(k) contributions as a result of economic conditions. Instead, most are modifying their spending by reducing the number of purchases they make (40%) and buying cheaper products (39%). In addition, 401(k) loans and hardship withdrawals are down to 21% from 26% a year ago, according to the survey.

On average, workers expect to retire at age 66 and believe they will need $1.6 million saved. They estimate their savings will last 22 years in retirement.

“401(k) investors continue to face uncertainty,” said Lee McAdoo, Managing Director, Schwab Retirement Plan Services. “Inflation and market volatility remain top of mind, which can make it difficult to develop a long-term retirement strategy. It’s encouraging to see that most savers are prioritizing consistency in terms of their contribution rates and are largely avoiding dipping into their retirement savings – a positive sign that they are focused on their futures.”

Searching for retirement income

Savers have become increasingly reliant on workplace plans for retirement income in recent years. On average, they estimate that their 401(k)s will provide 45% of their retirement income, up 2% from last year. Social Security is expected to contribute 18% to retirement income, also a 2% increase.

Workers are navigating their investments carefully. About one quarter (23%) say they have adjusted their 401(k) portfolio due to inflation and volatility, and those who made changes primarily shifted their investments to be more conservative (79%).

A large majority - 83% - are also currently receiving financial advice. They’re most likely to tap their 401(k) plan (38%), family and friends (29%), or financial advisor (29%) for guidance.

“Whether you’re well off, struggling to make ends meet, or somewhere in between, we believe everyone can benefit from financial advice, and should have access to quality support,” said Marci Stewart, Director, Client Experience, Schwab Workplace Financial Services. “Just 27% of participants feel very confident making 401(k) investment decisions on their own – that level of confidence nearly doubles (51%) with the help of a financial professional.”

Generational trends

Gen Z is the most confident about their retirement prospects, with 53% saying they’re very likely to achieve their retirement savings goals. They expect to retire at age 62, earlier than their older peers. Gen Z is also the most likely to say they check their 401(k) weekly, with many checking more often than they were a year ago.

Gen Z, Millennials, and Gen X rely substantially on their 401(k) plans for advice. Family and friends are also prominent resources for Gen Z and Millennials. Boomers rely the most on their financial advisor.

In addition to their 401(k) plans, Gen X and Boomers are more likely to invest for retirement in an IRA and a brokerage account than younger savers.

Employers lend a hand

401(k) plans (85%) and health insurance (86%) are by far the most critical must-have benefits for workers and continue to be key for attracting talent. Three-quarters (74%) say they wouldn’t take a job without a 401(k).

Most participants (57%) say their employer has taken action to help manage their financial stress and the most common way is by increasing pay (33%). Participants also say their employers helped through an increased 401(k) match (15%), additional bonus (14%), and increased or added benefits (14%).

Among those who say their employer expanded or provided additional benefits to manage their financial stress, the most commonly provided benefit was a health savings account.

“We see employers playing a vital, expanding role in employees’ financial lives well beyond providing a paycheck,” said Stewart. “While the outlook for inflation is cloudy and market volatility remains a part of life, workplace benefits, including holistic financial support, can provide a welcome sense of stability and confidence for employees.”

About the survey

This online survey of 1,000 U.S. 401(k) plan participants and an additional 100 Gen Z plan participants was conducted by Logica Research between April 30 and May 17, 2025. Survey respondents were actively employed by companies with at least 25 employees, were 401(k) plan participants, and were 21-70 years old. Survey respondents include participants served by approximately 16 different retirement plan providers. All data is self-reported by study participants and is not verified or validated. Detailed results can be found here.

About Charles Schwab

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on X, Facebook, YouTube and LinkedIn.

Disclosures

Schwab Workplace Financial Services is a business enterprise which offers products and services through Schwab Retirement Plan Services, Inc.; Schwab Stock Plan Services; Schwab Designated Brokerage Services; and Schwab Retirement Business Services. Retirement Business Services includes Schwab Retirement Technologies, Inc.® (Schwab RT); Charles Schwab Trust Bank (Member FDIC); and Personal Choice Investment Services.

The Charles Schwab Corporation provides services to retirement and other benefit plans and participants through its separate but affiliated companies and subsidiaries: Charles Schwab Trust Bank (Member FDIC); Charles Schwab & Co., Inc. (Member SIPC, www.sipc.org); Schwab Retirement Plan Services, Inc.; and Schwab Retirement Technologies, Inc. ("Schwab RT").

Schwab Retirement Plan Services, Inc., provides recordkeeping and related services with respect to retirement plans. Brokerage products and services are offered by Charles Schwab & Co., Inc. (Member SIPC, www.sipc.org). Schwab Stock Plan Services is a division of Charles Schwab & Co., Inc. providing equity compensation plan services and brokerage solutions for corporate clients. Schwab Designated Brokerage Services (DBS), a division of Charles Schwab & Co., Inc., provides technology solutions for corporate clients with regulatory requirements to monitor employee security transactions. Schwab Retirement Technologies (“Schwab RT”) develops and licenses retirement plan recordkeeping software, systems, and hosting services for use by independent third-party administrators. Charles Schwab Trust Bank (Member FDIC) provides trust, custody, deposit products and services. Personal Choice Investment Services, a division of Charles Schwab & Co. Inc., provides services and solutions for employee benefit plans and participants.

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